The SECGov filed an emergency action against Miami-based crypto hedge fund BKCoin and one of its founders, Kevin Kang, who has been accused of misappropriating customer funds and running a “Ponzi-like” scheme. cheyenneligon reports
by a Florida court on Monday to freeze and appoint a receiver for the assets of Miami-based crypto hedge fund BKCoin and one of its co-founders, Kevin Kang.
According to regulators, BKCoin and Kang raised $100 million from over 50 investors, and used a portion of investor funds to make “Ponzi-like payments” and for personal use. BKCoin and Kang promised investors their money would be used to trade crypto, and that funds would be held in separately managed accounts, said the SEC. However, Kang and BKCoin allegedly commingled client money and used at least $3.6 million to make payments to other investors.
The SEC’s action comes five months after BKCoin’s core legal entity, BKCoin Management LLC, filed suit in a Florida circuit court alleging that Kang had “improperly diverted'' $12 million in cash and other assets out of BKCoin’s multi-strategy funds. Kang was fired from BKCoin on Oct. 14.The SEC has accused Kang of misappropriating at least $371,000 in customer funds for his personal use, including paying for vacations, tickets to sporting events and rent on his New York apartment.
The SEC is seeking permanent injunctions against both BKCoin and Kang, as well as disgorgement, prejudgement interest, and a civil penalty. The SEC is also seeking disgorgement from Bison Digital LLC, an entity that allegedly received $12 million from BKCoin’s investor funds.
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