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HomeCrypto$100 Million Crypto Fraud: SEC Sues BKCoin for Alleged Fraud

$100 Million Crypto Fraud: SEC Sues BKCoin for Alleged Fraud

The Securities and Alternate Fee (SEC) continues its regulatory actions in opposition to the crypto trade, archiving an emergency motion in opposition to Miami-based crypto hedge fund BKCoin and its principal Kevin Kang.

Based on the SEC’s criticism, the hedge fund, launched in 2018 by co-founders Carlos Betancourt and Kevin Kang, raised $100 million from greater than 55 buyers to spend money on crypto belongings, which its principal Kevin Kang used to “make Ponzi-style funds and for private use.” Eric Bustillo, director of the SEC’s Miami Regional Workplace, mentioned:

As we allege, buyers entrusted their cash to the defendants to commerce in crypto belongings. As an alternative, the defendants embezzled their cash, created false paperwork, and even engaged in Ponzi-like habits.

Has BKCoin dedicated the most important rip-off within the trade?

The SEC’s submitting in opposition to the Miami-based crypto hedge fund alleges that BKCoin and its principal, Kevin Kang, “violated” anti-fraud provisions of the federal securities legal guidelines. Based on the SEC submitting, BKCoin and Kang assured buyers that the cash could be used to commerce crypto belongings and produce further income for BKCoin by its separate managed accounts and 5 non-public 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, tickets to sporting occasions and an house in New York Metropolis.

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Based on the SEC’s criticism, Kevin Kang altered buyers’ paperwork with “inflated” checking account balances to the third-party administrator for a few of the capital that they had raised for the reason that crypto hedge fund’s launch.

SEC wipes out one other crypto firm

The criticism additionally accuses BKCoin of misrepresenting to its buyers that the crypto hedge fund or any of the 4 funds had acquired an audit report from a “high 4” auditor when, in accordance with the SEC, not one of the funds acquired an audit report someday between 2018 and 2022.

Based on the submitting, the SEC’s enforcement motion seeks “everlasting injunctions” in opposition to BKCoin and Kevin Kang, disgorgement, preliminary injunction and a civil penalty in opposition to each events. Eric Bustillo concluded:

This motion highlights our continued dedication to defending buyers and cracking down on 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 Oct. 8 for misappropriating $12 million in belongings from three multi-strategy funds, in accordance with an Oct. 28 archiving of the authorized entity BKCoin for Miami-Dade County within the State of Florida.

The full market cap remains to be beneath a trillion on the day by day chart. Supply: TOTAL TradingView.com

The worldwide cryptocurrency market cap at the moment stands at $985.9 billion, nonetheless under the trillion {dollars} misplaced since final week’s Silvergate feud. Right now, BTC’s market cap is $432 billion, dominating 40.36% of the sector.

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However, stablecoins have a market worth of $136 billion, with a share of 12.7% of the entire crypto market worth.

Featured picture from Unsplash, chart from TradingView.com

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