- They froze the company’s assets
- BKCoin accused of pyramid schemes and mixing customer funds
US SEC filed emergency lawsuit against BKCoin advisory company and its director Kevin Kang. The regulator accuses them of ignoring the structure of funds, mixing assets and creating a crypto pyramid. The complaint says that BKCoin attracted about $ 100 million from investors. But the head of the firm used part of the money for personal purposes – to buy real estate, pay for vacations and entertainment.
“Investors entrusted the defendants with their deposits to trade crypto assets. Instead, the defendants misappropriated capital, forged documents, and set up a structure bearing the hallmarks of a Ponzi scheme. We are unwaveringly committed to protecting investors and eradicating fraud across all securities sectors, including the crypto asset arena.” the SEC lawsuit says.
Note that the proceedings against Kevin Kang have been going on for 5 months. Last year, BKCoin Management LLC (the parent company of BKCoin) filed a lawsuit against him. They claim that Kang withdrew $12 million from the funds of the BKCoin holding. The businessman was fired from the company on 14 October.
The SEC has secured emergency relief from a Florida court – now BKCoin’s assets are frozen pending further proceedings. The regulator also received the right to appoint a manager for the company’s assets and take other urgent measures.
All this is happening against the backdrop of tough US sanctions against a number of crypto companies. And also in the conditions when the local media write a series of “revealing” articles.