The U.S. Securities and Exchange Commission (SEC) was granted emergency relief on Monday to freeze and appoint a receiver for the assets of Miami-based hedge fund BKCoin and one of its co-founders, Kevin Kang, in an alleged cryptocurrency fraud scheme.



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Kang and BKCoin allegedly used US$3.6 million worth of “Ponzi-like payments” to fund investors after raising US$100 million from at least 55 investors, the SEC said . 



The SEC also accused Kang of commingling with client assets to fund a personal splurge of at least US$371,000 on sporting tickets, vacations, and a “New York City apartment.” The agency said it is seeking permanent injunctions against BKCoin and Kang. 



Last October, BKCoin suspended Kang from employment and sued him for diverting US$12 million in cash and other assets from BKCoin’s multi-strategy funds. 



The SEC has been accelerating its crackdown on crypto-related fraud. It filed nine cyber enforcement actions related to crypto so far this year, compared to two actions filed over the same period in 2022. 



Illicit crypto transaction volume rose to an all-time high of US$20.1 billion in 2022. However, crypto scam revenue fell to US$5.9 billion from US$10.9 billion recorded in 2021 due to falling crypto prices, according to blockchain forensics firm Chainalysis .




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