The cryptocurrency industry is no stranger to scams and frauds, and investors have been warned about the risks of investing in the industry.
In a recent development, the US Securities and Exchange Commission (SEC) has filed an emergency action against BKCoin and its co-founder, Kevin Kang, for defrauding investors of $100 million.
According to the complaint filed by the SEC, BKCoin and Kang had promised investors that their funds would be used to trade crypto assets, which would earn them huge returns on their investments.
They even claimed to have received an audit opinion from a top-four auditor. However, the defendants used only $3.6 million to pay out to others in a Ponzi scheme model, while Kang allegedly misappropriated over $370,000 for personal interests.
The SEC has frozen some of the assets under BKCoin, alleging that the defendants violated federal securities laws on fraud. The commission is seeking a permanent injunction against the duo and disgorgement from Bison Digital LLC for receiving $12 million from BKCoin.
This is not the first time the SEC has taken regulatory action against fraudsters in the cryptocurrency industry. The commission had also charged eight individuals involved in the CoinDeal scam, who had promised to sell CoinDeal to investors with great returns, but the project sale never occurred.
Additionally, the SEC had investigated two advisory companies, Edelman Blockchain Advisors LLC and Creative Advancement LLC, and their owner, Gabriel Edelman, for operating a Ponzi scheme that saw investors lose $4.4 million.
