Miami crypto company ‘looted’ investor money in $100 million Ponzi scheme, SEC says

A Miami company that told investors money would be used in the modern market of crypto-asset trading used investor money in that old Miami staple, the Ponzi scheme, according to a Securities and Exchange Commission complaint.

The Miami federal court filing unsealed last week described a $100 million Ponzi scheme by BKCoin Management and one of its founders, New Yorkbased Min Woo Kang, also known as Kevin Kang.

Kang, the SEC said, “misappropriated” investor money to pay for sports tickets, “fine dining,” a Hamptons vacation home and a down payment on a New York apartment.

That apartment is now part of an asset freeze covering Kang; BKCoin Management, LLC; BKCoin Capital; BK Offshore Fund, Ltd.; BKCoin Multi-Strategy Master Fund, Ltd.; BKCoin MultiStrategy Fund, LP; BKCoin Multi-Strategy Fund Ltd.; and Bison Digital LLC.

The asset freeze came down Feb. 24, a day after the SEC filed its complaint.

The court also appointed Michael I. Goldberg of the Akerman law firm as receiver for the BK companies. The online docket doesn’t list attorneys for Kang or the BKCoin companies. Celia Cohen of Ballard Spahr is representing Kang in a suit filed in New York by Miami Lakes resident Alejandro Canto.

The SEC complaint says 55 investors gave BKCoin Management and Kang $100 million.

Though the complaint says BKCoin’s main place of business is Miami and state of Florida records say its address is 1101 Brickell Ave. S Tower, No. 8, BKCoin wasn’t registered to do business in Florida until Dec. 13, 2021. Like many companies, BKCoin’s registered legal home is Delaware.

The SEC complaint says BKCoin and Kang told investors that their money would be used for cryptoasset trading. Also, they claimed BKCoin or one of the BKCoin multi-strategy funds “is one of the only firms with a U.S. opinion from a top four auditor.”

One investor, the complaint says, put $1.3 million in a multi-strategy fund account just over a month after receiving an email with that claim on May 24, 2022.

“The Big Four” auditors are Ernst & Young, KPMG, PriceWaterhouseCoopers, and Deloitte Touche. An auditor’s opinion is based on the procedures used to produce financial records or statements.

An opinion is also something the SEC says

BKCoin never received from the Big Four or any other auditor of any size. The complaint accuses Kang of giving false account balances to a thirdparty administrator for use in performance reports delivered to investors.

As for using the money for crypto assets, BKCoin and Kang “disregarded the BKCoin Funds’ structures, commingled investor assets among the BKCoin Funds and misappropriated investors’ funds for unauthorized purposes,” the SEC said.

BKCoin and Kang “looted substantially all investor deposits for the multi-strategy funds,” the complaint says.

THE SEC SAID KEVIN KANG TOOK MONEY TO PAY FOR SPORTS TICKETS, ‘FINE DINING,’ AND HOMES.