The Securities and Alternate Fee (SEC) continues its enforcement actions towards the crypto trade, submitting an emergency motion towards Miami-based crypto hedge fund BKCoin and its principal Kevin Kang.
Based on the SEC’s grievance, the hedge fund, launched in 2018 by co-founders Carlos Betancourt and Kevin Kang, raised $100 million from greater than 55 traders to put money into crypto property, which its principal Keving Kang used to “make Ponzi-like funds and for private use.” Eric Bustillo, director of the SEC’s Miami Regional Workplace, mentioned:
As we allege, traders entrusted their cash to the defendants to commerce in crypto property. As an alternative, the defendants misappropriated their cash, created false paperwork, and even engaged in Ponzi-like conduct.
Has BKCoin Perpetrated The Trade’s Largest Rip-off?
The SEC’s submitting towards the Miami-based crypto hedge fund alleges that BKCoin and its principal, Keving Kang, “violated” the antifraud provisions of the federal securities legal guidelines. Based on the SEC’s submitting, BKCoin and Kang assured traders that the cash could be used to commerce crypto property and produce additional income for BKCoin by way of its separate managed accounts and 5 non-public funds.
As well as, Kang and BKCoin allegedly used greater than $3.6 million to make “Ponzi-like” funds to fund traders. On this regard, the SEC alleges that Kang “misappropriated” greater than $371,000 of investor funds to pay for holidays, sporting occasion tickets, and a New York Metropolis condo.
Based on the SEC’s grievance, Kevin Kang altered traders’ paperwork with “inflated” checking account balances to the third-party administrator for among the capital they’d raised because the crypto hedge fund’s launch.
SEC Wipes Out One other Crypto Agency
The grievance additionally accuses BKCoin of misrepresenting to its traders that the crypto hedge fund or any of the 4 funds had obtained an audit report from a “high 4” auditor when, in keeping with the SEC, not one of the funds obtained an audit report, anytime between 2018 and 2022.
Based on the submitting, the SEC’s enforcement motion requests “everlasting injunctions” towards BKCoin and Kevin Kang, disgorgement, prejudgment curiosity, and a civil penalty towards each events. Eric Bustillo concluded:
This motion highlights our continued dedication to defending traders and uprooting fraud in all securities sectors, together with the crypto asset area.
BKCoin co-founder Kevin Kang was beforehand fired by BKCoin’s core authorized entity, BKCoin Administration LLC, on October 8 for allegedly misappropriating $12 million in property from three multi-strategy funds, in keeping with an October 28 submitting by the BKCoin authorized entity for Miami-Dade County within the state of Florida.
The worldwide cryptocurrency market capitalization is presently at $985.9 billion, nonetheless beneath the trillion greenback mark misplaced since final week’s Silvergate feud. Right now, BTC’s market cap is $432 billion, dominating 40.36% of the sector.
Then again, the stablecoins market cap is at $136 billion, with a share of 12.7% of the full crypto market capitalization.
Featured picture from Unsplash, chart from TradingView.com