The Securities and Exchange Commission has  filed an emergency action against Miami-based investment adviser BKCoin Management LLC and one of its principals, Kevin Kang, in connection with a crypto asset fraud scheme

BKCoin received $100 million from at least 55 individuals to invest in cryptocurrency, however BKCoin and Kang misappropriated part of the funds for personal expenses and Ponzi-like payouts.

Investors were reassured by BKCoin and Kang that their cash would be utilised largely for trading digital assets, and they were told that BKCoin would provide profits for them through five private funds and independently managed accounts.

According to the complaint, BKCoin ignored the fund structure, mixed up investor assets, and spent more than $3.6 million to pay fund investors in a Ponzi-like fashion. The lawsuit claims that Kang misutilised at least $371,000 from investors to use for, among other things, trips, sports tickets, and an apartment in New York City.

The SEC successfully secured an asset freeze, the appointment of a receiver, and other forms of emergency relief.

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