SEC Halts Crypto Asset Fraud Scheme of Miami-Based BKCoin Management LLC

The Securities and Exchange Commission (SEC) today filed an emergency action against Miami-based investment adviser BKCoin Management LLC and its principal Kevin Kang in connection with a crypto asset fraud scheme. The SEC's complaint alleges that since October 2018, BKCoin has raised approximately $100 million from at least 55 investors to invest in crypto assets but in reality used investor money to make Ponzi-like payments and for personal use. Additionally, BKCoin misrepresented to investors that the money was being used for trading crypto assets and credited itself with a false audit by a "top four auditor". The court granted emergency relief to the SEC, including freezing of assets, appointment of a receiver, and other measures. The SEC is also seeking permanent injunctions from both defendants, disgorgement, prejudgment interest, and civil penalties. The SEC is further investigating the case with assistance from Adrian Gonzalez, James Richardson, and Jean Cabot. In addition, the SEC released investor alerts on digital asset and pyramid schemes posing as multi-level marketing programs.