Latest SEC Crypto Regulation Crackdown Targets Miami Investment Manager BKCoin

The U.S. Securities and Exchange Commission is not wavering in its crypto regulation war as another week brings another enforcement action.

On March 6, the SEC announced its latest emergency action against Miami-based investment adviser BKCoin Management.

The regulator’s latest salvo in the war on crypto included an asset freeze. Furthermore, it accused the company and one of its principals, Kevin Kang, of orchestrating a $100 million crypto fraud scheme from October 2018 through September 2022.

It stated that the firm raised the funds from at least 55 investors to invest in crypto assets. “BKCoin and Kang instead used some of the money to make Ponzi-like payments and for personal use,” it added.

Misappropriating Funds

According to the complaint, the firm would generate profits for investors with crypto investments and five private funds.

However, the defendants disregarded the structure of the funds. They also “commingled investor assets and used more than $3.6 million to make Ponzi-like payments to fund investors,” it added.

Kang also misappropriated at least $371,000 of investor money to pay for vacations, sporting events tickets, and a New York City apartment.

Furthermore, he attempted to conceal the use of investor money by providing “altered documents with inflated bank account balances to the third-party administrator,” the complaint stated.

Director of the SEC’s Miami Regional Office, Eric Bustillo, said:

“This action highlights our continued commitment to protecting investors and uprooting fraud in all securities sectors, including the crypto asset arena.”

The regulator is now seeking permanent injunctions against BKCoin and Kang. It will also levy a civil penalty against both of the defendants. It also seeks disgorgement from each of the funds and Bison Digital LLC, “an entity that allegedly received approximately $12 million from BKCoin.”

Crypto Regulation War Intensifies

The SEC has ramped up its war on crypto in the wake of the FTX collapse in November. In January, the agency brought enforcement actions against Genesis and Gemini, and it followed up with a $30 million fine for Kraken in February.

Other firms currently in SEC scopes include Coinbase, Binance, and Paxos, with liquid staking platform Lido and stablecoin issuer Circle possibly on its target list.  

SEC chair Gary Gensler has publicly stated several times that he believes all crypto assets aside from BTC are securities. However, U.S. Congress has yet to introduce formal legislation to officially classify them as such.

This has caused a wave of criticism from industry experts and executives. Many of them disagree with this “carpet bombing” of the industry and regulating by enforcement instead of fostering fintech innovation. However, cracking down on industry fraudsters gets no objections.


BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.

Bookmark (0)
ClosePlease loginn

Related Posts

Bitcoin: The Best Performing Asset Class in Q1 2023

Bitcoin set for its best trading quarter in nearly 2-years.
The top cryptocurrency vastly outpaces stocks performance.
BTC is well placed for more gains in Q2 2023.

Bookmark (0)
ClosePlease loginn

USDC Supply Shrinks by $10 Billion in March, But Hits 6-Month High on Smart Contracts

USDC supply declined by $10 billion in March following its exposure to the US banking crisis.
However, the stablecoin use on smart contracts reached a six-month high of 42.08%.
Tether USDT is now the dominant stablecoin, accounting for over 60% of the market.

Bookmark (0)
ClosePlease loginn

Bittrex Quits US, Cites Unfavorable Regulatory Environment

Crypto exchange Bittrex said it was leaving the United States because of the regulatory environment.
The crypto company had had previous skirmishes with financial regulator in the country.
Crypto stakeholders have warned that the US regulatory landscape would force many firms out of the country.

Bookmark (0)
ClosePlease loginn

Solana overcomes FTX fiasco — SOL price gains 100% in Q1

The cryptocurrency market may have overreacted to Solana’s FTX links and its tainted boss, Sam Bankman-Fried.

Bookmark (0)
ClosePlease loginn

Elon Musk requests dismissal of $258B Dogecoin lawsuit: Report

The plaintiff’s brought up Musk’s Saturday Night Live appearance in 2021, where he portrayed “a fictitious financial expert” and called Dogecoin “a hustle,” resulting in a steep price decline minutes later.

Bookmark (0)
ClosePlease loginn

Here’s how the crypto industry is using artificial intelligence

The rise of artificial intelligence, though in its early stages, has found use cases in crypto through countless projects.

Bookmark (0)
ClosePlease loginn

Leave a Reply

Your email address will not be published. Required fields are marked *