BKCoin faces $100 million SEC fraud charge

The banking regulator’s lawsuit alleges that BKCoin and Kang misused over $100 million in investor funds to invest in crypto.

In its most recent enforcement action, the United States Securities and Exchange Commission, or SEC, targeted an investment advisor and a person allegedly involved in a $100 million bitcoin scheme.

According to an announcement made on March 6, the Securities and Exchange Commission (SEC) took emergency action against investment adviser BKCoin and one of the principals, Kevin Kang, on February 23.

The SEC alleges that BKCoin and Kang “disregarded the structure of the funds, commingled investor assets, and used more than $3.6 million to make Ponzi-like payments to investors.”

The complaint filed with the banking authority said that BKCoin had received around $100 million from investors to invest in crypto, but that Kang had diverted some of the cash for personal purposes, such as taking holidays, purchasing tickets to sporting events, and renting an apartment.

According to the statements made by Eric Bustillo, the head of the SEC’s Miami Regional Office, “As we claim, investors entrusted their money to the defendants so that they may trade in crypto assets.”

The complaint filed by the SEC is the most recent example of an enforcement action that alleges breaches of the antifraud provisions of the federal securities laws and targets a company or persons engaged in cryptocurrency.

According to the regulating body, the SEC planned to pursue disgorgement, prejudgment interest, a civil penalty, and a permanent injunction against both BKCoin and Kang.

Also, the SEC intended to seek a permanent injunction against both parties.

As the Securities and Exchange Commission (SEC) moves forward on a series of anti-crypto actions, chair Gary Gensler, who is leading the agency as it moves forward on these actions, has been criticized by many in the space for classifying some crypto assets as securities through enforcement rather than the court system.