The Securities and Trade Fee (SEC) continues its enforcement actions in opposition to the crypto trade, submitting an emergency motion in opposition to Miami-based crypto hedge fund BKCoin and its principal Kevin Kang.
In response to 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 buyers to put money into crypto belongings, 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, stated:
As we allege, buyers entrusted their cash to the defendants to commerce in crypto belongings. As an alternative, the defendants misappropriated their cash, created false paperwork, and even engaged in Ponzi-like conduct.
Has BKCoin Perpetrated The Business’s Largest Rip-off?
The SEC’s submitting in opposition to the Miami-based crypto hedge fund alleges that BKCoin and its principal, Keving Kang, “violated” the antifraud provisions of the federal securities legal guidelines. In response to the SEC’s submitting, BKCoin and Kang assured buyers that the cash can be used to commerce crypto belongings and produce additional earnings for BKCoin by means of its separate managed accounts and 5 personal funds.
As well as, Kang and BKCoin allegedly used greater than $3.6 million to make “Ponzi-like” funds to fund buyers. 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 condominium.
In response to the SEC’s grievance, Kevin Kang altered buyers’ paperwork with “inflated” checking account balances to the third-party administrator for a number of the capital they’d raised for the reason that crypto hedge fund’s launch.
SEC Wipes Out One other Crypto Agency
The grievance additionally accuses BKCoin of misrepresenting to its buyers that the crypto hedge fund or any of the 4 funds had obtained an audit report from a “high 4” auditor when, based on the SEC, not one of the funds obtained an audit report, anytime between 2018 and 2022.
In response to the submitting, the SEC’s enforcement motion requests “everlasting injunctions” in opposition to BKCoin and Kevin Kang, disgorgement, prejudgment curiosity, and a civil penalty in opposition to each events. Eric Bustillo concluded:
This motion highlights our continued dedication to defending buyers and uprooting fraud in all securities sectors, together with the crypto asset enviornment.
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 belongings from three multi-strategy funds, based on an October 28 submitting by the BKCoin authorized entity for Miami-Dade County within the state of Florida.
The worldwide cryptocurrency market capitalization is at the moment at $985.9 billion, nonetheless beneath the trillion greenback mark misplaced since final week’s Silvergate feud. Right this moment, 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 whole crypto market capitalization.
Featured picture from Unsplash, chart from TradingView.com