Ponzi or not Ponzi?– There Securities and Exchange Commission (SEC) continues its series of repressive actions and seems determined to impose its law against alleged fraudsters in terms of cryptocurrencies. This time she announced a lawsuit against the crypto platform BKCoinaccused of having defrauded its investors to the tune of $100 million.
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BKCoin, a new crypto fraud in the crosshairs of the SEC
According to the SEC, BKCoin sold cryptocurrencies to investors under the guise of funding the development of its cryptocurrency exchange platform. However, the SEC claims that the company has never launched a platform and has never complied with the regulations in force in the United States. Worse, the funds would have been misappropriated for personal purposes.
According to the complaint filed by the regulator against BKCoin and his founder Kevin Kang in the United States District Court for the Southern District of Florida, the company also allegedly exaggerated the number of users and transactions made on its platform. It would be altogether $100 million which would have been stolen.
Freezing of assets, sequestration and emergency measure: the regulator does not mince words against BKCoin.
“From October 2018 to September 2022, BKCoin raised approximately $100 million from at least 55 investors to invest in crypto assets, but BKCoin and Kang instead used some of the money to make payments like Ponzi and for personal use. »
Press release – Source : DRY
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A dismantled Ponzi scheme
In detail, the SEC makes state of a deplorable situation in which the funds are being dispatched. Of the $100 million raised, $3.6 million would have made it possible to maintain the pyramid and pay the returns of the first investors. The rest would have been spent on luxurious living for the benefit of Kang.
“As the complaint alleges, the defendants disregarded the structure of the funds, mixed the assets of the investors and used more than $3.6 million to make Ponzi-like payments to fund investors. . The lawsuit also alleges that Kang misappropriated at least $371,000 of money from investors to, among other things, pay for vacations, tickets to sporting events and an apartment in New York City. »
The American regulator adds, moreover, that false documents would have been paid with these embezzled funds in order to obtain authorizations for BKCoin.
The crypto witch hunt for the SEC
The American regulator here confirms its vigilante status scammed crypto souls. After confirming its assault on stablecoins, the SEC therefore continues more than ever its repression against Ponzi schemes and other scams.
Eric Bustillo, director of the Miami regional office of the SEC confirms this strategy:
“As we claim, investors entrusted their money to the defendants to trade crypto assets (…). Instead, the defendants embezzled their money, created false documents and even engaged in Ponzi-like conduct. This action underscores our continued commitment to protecting investors and rooting out fraud in all securities industries, including the realm of crypto assets. »
Regulators therefore continue to step up their oversight of cryptocurrency-related activities, warning investors of the risks associated with these assets and prosecuting suspected fraudsters. Present on all fronts, from Ponzi schemes to Binance and the legal status of cryptocurrencies: it would seem that 2023 will be placed under the sign of regulation across the Atlantic.
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