(Bloomberg) -- Crypto hedge fund BKCoin Management and Min Woo “Kevin” Kang, one of the firm’s co-founders, are being accused by the US Securities and Exchange Commission of fraud and misusing investor funds.
The SEC said that Kang and BKCoin, which had allegedly raised nearly $100 million from investors, violated securities laws by making “Ponzi-like” payments. The case was filed in federal court in Miami on Feb. 23 and unsealed Monday.
BKCoin and a lawyer listed by the SEC for Kang didn’t immediately respond to requests for comment. Kang was “suspended” from employment by BKCoin in October, according to the SEC.
Kang was accused by the SEC of spending almost $400,000 of investor funds on himself, including about $35,000 to rent a vacation house in Montauk, New York. Tens of millions of dollars of investor funds are currently unaccounted for, the SEC said in its complaint.
“The defendants misappropriated their money, created false documents, and even engaged in Ponzi-like conduct,” Eric Bustillo, head of the SEC’s Miami office, said in a statement.
The regulator said on Monday that it had successfully obtained an asset freeze and that a receiver had been appointed. The investigation is ongoing, the regulator said.