SEC charges BKCoin and Kevin Kang for $100 million crypto fraud

Rick Steves

The defendants allegedly disregarded the structure of the funds, commingled investor assets, and used more than $3.6 million to make Ponzi-like payments to fund investors. 

The Securities and Exchange Commission has obtained an asset freeze against Miami-based investment adviser BKCoin Management LLC and one of its principals, Kevin Kang, in connection with a $100 million crypto fraud.

Eric I. Bustillo, Director of the SEC’s Miami Regional Office, said: “As we allege, investors entrusted their money to the defendants to trade in crypto assets. Instead, the defendants misappropriated their money, created false documents, and even engaged in Ponzi-like conduct. This action highlights our continued commitment to protecting investors and uprooting fraud in all securities sectors, including the crypto asset arena.”

Approximately $100 million from at least 55 investors

According to the complaint, from at least October 2018 through September 2022, BKCoin raised approximately $100 million from at least 55 investors to invest in crypto assets, but BKCoin and Kang instead used some of the money to make Ponzi-like payments and for personal use.

The defendants allegedly disregarded the structure of the funds, commingled investor assets, and used more than $3.6 million to make Ponzi-like payments to fund investors.

Kevin Kang also misappropriated at least $371,000 of investor money to, among other things, pay for vacations, sporting events tickets, and a New York City apartment, the SEC stated.

BKCoin’s principal then attempted to conceal the unauthorized use of investor money by providing altered documents with inflated bank account balances to the third-party administrator for certain of the funds, the financial watchdog alleges, adding that the firm claimed it received an audit opinion from a “top four auditor”, when in fact no audit opinion was made.

CoinDeal sued for $45 milion crypto scam

The SEC has recently sued several individuals involved in crypto scam CoinDeal, which raised more than $45 million from sales of unregistered securities to tens of thousands of investors worldwide.

Defendants claimed that investors could generate extravagant returns by investing in CoinDeal, a blockchain technology that would be sold for trillions of dollars to a group of prominent and wealthy buyers.

However, the sale of CoinDeal never occurred and no distributions were made to CoinDeal investors, the SEC stated, adding that the defendants collectively misappropriated millions of dollars of investor funds for personal use.

SEC charged Trade Coin Club for $295 million Ponzi scheme

In late 2022, the SEC announced charges against famous fraudulent crypto Ponzi scheme, Trade Coin Club, a “multi-level marketing program” that operated from 2016 through 2018 and promised profits from the trading activities of a purported crypto asset trading bot.

Trade Coin Club raised more than 82,000 bitcoin – valued at $295 million at the time – from more than 100,000 investors worldwide. Defendants Douver Torres Braga and Joff Paradise told investors the bot made “millions of microtransactions” every second, and that investors would receive minimum returns of 0.35 percent daily.

According to the SEC, however, Douver Torres Braga siphoned off investor funds for his own benefit and to pay a network of worldwide Trade Coin Club promoters, including defendants Paradise, Taylor, and Tetreault. Operating as a Ponzi scheme, investor withdrawals came entirely from deposits made by investors, not from any crypto asset trading activity by a bot or otherwise, the SEC claims, further alleging the overall amounts received by each of the defendants:

Read this next

Retail FX

Axi extends partnership deal with Manchester City

FX broker Axi, previously known as AxiTrader, has renewed its flagship sponsorship deal with soccer giant Manchester City.

Digital Assets

Russia delays digital ruble pilot to May

Russia has postponed its central bank digital currency (CBDC) pilot indefinitely, which was originally scheduled for April 1, as it awaits specific legislation to be voted before the “crypto ruble” trial.

Executive Moves

Scope Markets promotes James Hughes to head of marketing

Belize-based FX and CFDs brokerage Scope Markets has promoted James Hughes, who until recently was its head of brand, to take on an expanded role as the company’s global head of marketing.

Retail FX

Fraudsters clone Financial Commission’s website, two ex-members under suspicion

The Financial Commission, an industry-specific dispute resolution service that caters to the financial services industry, today announced that it believes a clone website has been impersonating its membership roster.

Retail FX

CMC Markets warns of operational challenges in Q1

CMC Markets PLC (LSE:CMCX) said in a trading update for the fiscal year 2023 that February and March posed a more challenging environment with lower equity volumes and a higher proportion of lower margin institutional trading activity.


Why Is Digital PR So Important for Financial Service Providers? Buzz Dealer’s CEO Uri Samet with the Answers

Digital PR is all about spreading your message faster, wider, and stronger in the online world, through proper SEO, link-building, and organic and paid social media work.

Inside View

Why And How Are Virtual Cards Disrupting The Finance Industry

Virtual cards have the potential to revolutionize the finance industry by providing faster and more secure payments, wider acceptance, and eco-friendliness.


Sweat Economy’s Oleg Fomenko on upcoming launch of Move-to-Earn app in the US

With the crypto winter’s biggest hurdles seemingly behind us as the prices of Bitcoin et al. climb the charts again, the Web3 economy is preparing for the next phase.

Industry News

OptionMetrics acquires Woodseer to add dividend forecast data for equities

“The addition of Woodseer’s product suite will enhance our ability to serve financial market stakeholders and academic institutions in their analysis of equity market performance and risk.”