The U.S. Securities and Exchange Commission announced an emergency action on Monday against Miami-based investment adviser BKCoin Management LLC and one of its principals, Kevin Kang, alleging a crypto-asset fraud scheme. The SEC said it successfully obtained an asset freeze, appointment of a receiver, and other emergency relief. The SEC said the emergency action was filed under seal on Feb. 23 and unsealed Monday.
Between October 2018 and September 2022, BKCoin raised around $100 million from at least 55 investors to invest in crypto, but the firm and Kang allegedly used the money for personal use and Ponzi-like payments, the SEC said in a news release. A Ponzi scheme is a type of fraud that pays profits to earlier investors with funds raised from newer investors. “As we allege, investors entrusted their money to the defendants to trade in crypto assets. Instead, the defendants misappropriated their money, created false documents, and even engaged in Ponzi-like conduct,” said Eric I. Bustillo, director of the SEC’s Miami regional office, in a stat …