Gensler’s Crusade Continues: SEC Shuts Down ‘$100M Crypto Fraud Scheme’

BKCoin raised $100 million in four years but used some of it to make “Ponzi-like payments and for personal use.”

A muscular SEC chairman Gary Gensler walks with fire and explosions all around him.
  • The SEC froze Miami-based investment adviser BKCoin’s assets.
  • The agency alleged that the firm used the millions of dollars it raised to make “Ponzi-like payments and for personal use.”
  • The SEC has been very active in crypto in the last few months.

The U.S. Securities and Exchange Commission (SEC) chairman Gary Gensler continues his relentless crusade against crypto companies.

On Tuesday, the SEC announced that it had filed an emergency action against BKCoin, a Miami-based digital asset investment adviser that the SEC called a “$100 million crypto fraud scheme”.

The SEC has frozen BKCoin’s assets, appointed a receiver, and other emergency relief against the firm and its co-founder Kevin Kang.


The SEC’s crackdown on BKCoin comes under the suspicion that the firm and Kang ran a fraud scheme. The agency said that BKCoin raised around $100 million from 2018 to 2022 from at least 55 investors to invest in digital assets and used some of those funds to “make Ponzi-like payments and for personal use.”

Gary Gensler. Crypto regulation in 2023

SEC chairman Gary Gensler

According to the SEC, BKCoin promised investors to invest in crypto assets and generate profits through separate accounts and five private funds. However, the firm disregarded the structure of the funds, commingled investor assets, and used more than $3.6 million to make Ponzi-like payments to fund investors.


The SEC also said Kang used at least $371,000 of investor funds to pay for vacations, sporting events, and a New York City apartment. The agency alleged that the defendants violated the antifraud provisions of the federal securities laws.

The legal action against BKCoin is just one of the flurry of anti-crypto objections, lawsuits, and comments made by the agency in the past months.

Gensler’s Crusade Against Crypto Continues

Gensler has been on a roll lately targeting crypto companies. For example,  a few weeks ago, the agency fined the centralized crypto exchange Kraken $30 million and ordered it to shut down its staking program.

The SEC has also targeted stablecoins. Gensler’s agency has recently sued Paxos and ordered it to stop issuing BUSD, a Binance-branded stablecoin, alleging that it’s an unregistered security.

At the same time, the SEC is sending out subpoenas to NFT projects, aiming to find dirt and classify NFTs as securities. There have also been rumors that multiple decentralized finance (DeFi) platforms have received Wells Notices, a formal document that informs the recipient of forthcoming legal action against it.

On the Flipside

  • While it’s positive that the SEC is taking legal action against potential criminal entities like BKCoin, others believe that actions against Kraken or Paxos are unsubstantiated and aimed at crippling the crypto industry.

Why You Should Care

The crypto industry is full of scammers and grifters. Investors should always do their own research before deciding where to invest their money.

Read more about the SEC’s stance on what is and isn’t a security:
Crypto Twitter Gears Up for a Fight: SEC’s Gensler Dubs ‘Everything Except Bitcoin’ a Security

Read more about Bybit’s newest product: 
Bybit Introduces Mastercard-Powered Debit Card Days After Halting USD Transfers

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Arturas Skur

Arturas Skur is a cryptocurrency news reporter at DailyCoin who covers Web 3.0 domains, DeFi, and Ethereum Layer-2s. With over five years of experience in journalism and public relations, Arturas brings his critical thinking and analytical abilities to deliver insightful news stories. In his free time, he enjoys hiking, playing with his dog, and reading.