The fear of the US Securities and Exchange Commission (SEC) continues to rise throughout the cryptocurrency industry.
If not the entire crypto industry, then its fear has surged substantially throughout the US-based crypto industry.
US SEC Goes after BKCoin Management
The regulator has been going after one crypto firm after another. This time it is the BKCoin Management LLC that is facing a major lawsuit from the US SEC.
Even Kevin Kang, the co-founder of BKCoin Management, a financial advisory firm based in Miami, has been included in the lawsuit filed by the regulator.
According to the latest reports, the US SEC has proceeded with filing and pursuing an emergency action against BKCoin Management LLC.
It has been claimed in the lawsuit that BKCoin and Kevin Kang were involved in running a cryptocurrency scheme that was fraudulent.
The lawsuit claims that they were involved in a $100 million scheme that had been launched for the purpose of defrauding customers based in the US.
The US SEC has requested the court to impose financial penalties on Kang and BKCoin Management LLC. It has been demanded that Kang must become entitled to a conduct-based injunction.
The US SEC filed the complaint against the firm and its co-founder on March 10. The regulator claimed that the particular firm was involved in generating almost $100 million from the fraudulent scheme.
Surprisingly, the firm did not have to include many investors to generate such a large fund from October 2018 to September 2022.
According to the US SEC’s claim, they reportedly targeted 60-70 investors to generate such a large fund.
All of the investors targeted by the company were promised that the funds they deposited would be used for the purpose of carrying out crypto trades.
These claims were made and communicated by the co-founder of BKCoin. They proceeded with claiming that the investments made by the customers would bring in huge returns.
The company and the co-founder were able to target many investors with these claims but these claims never reached fruition.
Funds were used for Personal Benefits
It’s been added further into the complaint that instead of using the funds as promised, the company and Kang used the funds for personal gains.
The defendant simply proceeded with disregarding the promises they had made and instead, they used the money to advertise their Ponzi scheme.
They kept promoting their Ponzi scheme using the funds coming in from the investors and making payments for the promotions.
The US SEC also claimed that while the company was involved in such activities, Kang was stealing funds from the investments for personal benefits.
He went on to steal the funds from the investments, using them for holidays. The regulator alleged Kang of stealing more than $370k and using the funds for holidays.
He used the money to purchase a property in New York City and also used it for buying tickets to events, and other functions.
False Claims from BKCoin
The regulator has also claimed that BKCoin was involved in making false statements to the investors. The company once claimed that they had an audit carried out for their company and had received an audit opinion for the purpose.
They claimed that it was one of the four largest auditors that had given them the audit opinion. After doing their investigation, they verified that no such notion had been obtained by BKCoin from any auditor.
The US SEC added in the complaint that it was the complete responsibility of BKCoin and its co-founder to ensure the investors received what they were promised.
There should not have been any cases where the company or the co-founder used the investors’ funds for their operations and personal gains.
They have added that the company and the co-founder even forged false documents to cement their claims, thus, proceeding with their misleading tactics.