SEC Launches Vigorous Action against Potential Crypto Fraudster, Bkcoin
The Securities and Exchange Commission of the US (SEC) informed on Monday that enforcement action has been initiated against a potential crypto fraudster.
SEC’s announcement indicated that the allegations of ‘defrauding investors’ have been leveled against a popular Miami-based investment advisory firm called ‘Bkcoin’.
SEC has alleged that Bkcoin along with Kevin Kang (i.e. Bkcoin’s principal) was responsible for executing over a hundred million dollar crypto-Ponzi scheme.
US’s watchdog of securities is of considered the view that the ‘so-called investment advisory firm’ is the main perpetrator behind the fraudulent scheme.
According to the information supplied by SEC itself, SEC has already obtained search, seizure, and arrest warrants against the fraudsters.
Furthermore, SEC has also obtained the necessary order for putting in place a court-appointed received at Bkcoin.
Specific Allegations Raised by SEC
As per the SEC-provided information, Bkcoin orchestrated and operated the objectionable scheme for at least 4 years from 2018 to 2022.
SEC raised an allegation that Bkcoin and Kang fraudulently collected funds amounting to more than $100 Million during that period. According to SEC, there were only 50 investors who contributed to the 100 million dollars.
The investors were made to believe that their funds would be used for onward investment into multiple top-of-the-line digital currencies plus assets.
It has been noticed by SEC that Bkcoin failed to fulfill its commitment to returning promised profits to the investors.
It further noticed that Bkcoin had also committed to providing each investor a separate account where their profits were supposed to be deposited. Yet again Bkcoin failed in keeping its promise, claimed SEC.
Similarly, investors were further told that Bkcoin would launch for them at least 5 crypto-backed investment funds. SEC noted that none of such funds were ever launched or spoken of by Bkcoin.
Manipulation of Funds for Funding Investors with Ill-Intent
SEC accused Bkcoin of intentionally ignoring and overlooking the basic structure and purpose of funds provided to it on trust by investors.
The funds were manipulated so as to temporarily fund a handful of investors for ensuring that the business continues to run.
Similarly, such a tactic was used also for guaranteeing that customers keep on trusting the scheme and management.
Approximately $3.6 Million in funds were ill-intently provided to investors which were in fact taken out of investors’ overall contribution of $100 Million.
SEC’s specific allegation against Bkcoin’s principal Kang is that Kang embezzled approximately half a million dollars belonging to Bkcoin’s investors.
Kang used this money for funding his personal leisure activities. With that money, he even bought an apartment in a posh area in the middle of New York City.
Allegation of ‘Material Misrepresentation’
He even managed to forge accounting documents for hiding the misappropriation of investors’ funds. He further went on to disclose fake bank accounts to third parties for gaining and winning their trust.
Allegation of ‘material misrepresentation’ was also raised by SEC against Bkcoin. For instance, SEC claimed that Bkcoin told investors that its accounts were audited by one of the top-tier accountants in the US.
However, facts revealed that Bkcoin was lying to the investors because its accounts were never audited by any top-tier accountant.
SEC is now in a litigation dispute with Bkcoin and its principal Kang. The litigation claim lodged by SEC is accompanied by a permanent injunction relief against Bkcoin, principal Kang and key officials of Bkcoin.
In the SEC claim, the securities watchdog has also prayed to the Court for granting interest, cost of litigation, disgorgement, penalty, etc.
It is likely that the lawsuit will be decided in favor of the SEC and against Bkcoin, principal Kang and other officials of Bkcoin.
Over the course of the past few months, SEC has been taking similar actions against potential fraudsters. SEC’s Chairman had suggested that the crypto industry needed cleaning and that SEC will make sure to keep it neat and clean.
So far none from Bkcoin or Kang have made any comments with regard to the allegations raised by SEC.