The SEC Files a Lawsuit Against BKCoin and Its Founder Implicating a $100 Million Fraud

Many crypto investors have lost money to frauds such as BKCoin. According to the report, the DeFi business lost a staggering $678 million to hackers in the second quarter of 2022, proving the underlying risks of the industry.

Strangely, these frauds sometimes arrive in official packaging, leading investors to believe they are legitimate. The US Securities and Exchange Commission claims a recent scam package is an offer from BKCoin and its inventor. For deceiving investors, the commission has initiated an emergency action against the financial advising business.

The SEC said in a lawsuit that the defendants took $100 million via a fraudulent crypto scheme. The SEC issued a news statement claiming that between October 2018 and September 2022, the defendants misled 55 investors.

The firm and its co-founder Kevin Kang had informed the investors that their cash would be used to trade crypto assets, resulting in enormous returns on investment. The defendants misrepresented the investors by claiming they had gotten an audit opinion from a top-four auditor.

Nevertheless, rather than trading cryptocurrency with investor cash, the defendants utilized $3,600,000 to pay out to others in the typical Ponzi scheme fashion. Subsequently, Kang stole more than $370,000 for his benefit, including paying for vacations, purchasing a home in New York City, and purchasing tickets to sports events.

After initiating the emergency action, the commission froze certain BKCoin assets, charging that the defendants violated federal securities fraud statutes. Also, it wants a permanent injunction against the two individuals and disgorgement from Bison Digital LLC for earning $12 million from BKCoin.

In addition to BKCoin and its co-founder, the SEC has taken regulatory action against other industry-active fraudsters. A noteworthy event was CoinDeal, another fake cryptocurrency operation.

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