Latest Action Targets Miami Firm BKCoin

The US Securities and Exchange Commission is not about to waver in its crypto regulation battle as another week brings another enforcement action.

On March 6, the SEC announced its latest emergency action against Miami-based investment advisor BKCoin Management.

The regulator’s latest salvo in the war on crypto includes an asset freeze. Furthermore, it accused the company and one of its principals, Kevin Kang, of planning a $100 million crypto fraud scheme from October 2018 to September 2022.

It said that the firm raised funds from at least 55 investors to invest in crypto assets. “BKCoin and Kang in turn used some of the money for Ponzi-like payments and personal use,” it added.

misappropriation of funds

According to the complaint, the firm would make crypto investments and profits for investors with five private funds.

However, the defendants disregarded the composition of the fund. He also said it “combined investors’ assets and used more than $3.6 million to make Ponzi-like payments.”

Kang embezzled at least $371,000 of investor funds to pay for vacations, tickets to sporting events, and a New York City apartment.

In addition, he attempted to conceal the use of investor funds by providing “altered documents with inflated bank account balances to third-party administrators,” the complaint states.

Eric Bustillo, director of the SEC’s Miami regional office, said:

“This action highlights our continued commitment to protecting investors and eliminating fraud in all securities sectors, including the crypto asset sector.”

The regulator is now seeking a permanent injunction against BKCoin and Kang. It will also impose a civil penalty against both defendants. It sought disclaimers from each fund and Bison Digital LLC, “an entity that allegedly received approximately $12 million from BKCoin.”

The crypto regulation war has intensified

The SEC has intensified its war on crypto in the wake of the collapse of FTX in November. In January, the agency took enforcement action against Genesis and Gemini, and followed it up with a $30 million fine for Kraken in February.

Other firms currently in SEC scope include Coinbase, Binance and Paxos, with liquid staking platform Lido and stablecoin issuer Circle possibly on its target list.

SEC Chairman Gary Gensler has publicly stated several times that he believes all crypto assets except BTC are securities. However, the US Congress has yet to introduce formal legislation to officially classify them.

This has triggered a wave of criticism from industry experts and officials. Many of them disagree with this “carpet bombing” of the industry and promote fintech innovation rather than be regulated by enforcement. However, there is no objection to cracking down on the fraudsters of the industry.




BeInCrypto has reached out to the company or individual involved in the story for an official statement regarding the recent developments, but has not yet received a response.

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