The Securities and Exchange Commission has accused a Miami-based advisor of running a crypto asset fraud scheme that allegedly raised about $100 million from at least 55 investors.

The SEC announced this week that it filed an emergency action that resulted in an asset freeze, the appointment of a receiver and other emergency relief against BKCoin Management and one of its principals, Kevin Kang, 33, of New York City, in connection with the alleged fraud. Kang was a co-founder of BKCoin and one of its two managing members, the SEC said.

The regulator alleges that from October 2018 to September 2022, BKCoin raised the funds, used some of the money to make Ponzi-like payments to some investors and spent $371,000 of client money for personal expenses including vacations, sporting event tickets and a New York City apartment.

BKCoin and Kang falsely told investors that their money would be used primarily to trade crypto assets and yield returns through separately management accounts and five private funds, the SEC said in a complaint filed with the U.S. District Court for the Southern District of Florida.

"The defendants 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 said.

BKCoin and Kang also used fake documents with inflated account balances to hide the scheme from a third-party administrator for certain funds, the agency said.

The scheme started to collapse in October 2022 when BKCoin suspended Kang and notified investors that it was suspending redemption requests and capital withdrawals from the BKCoin funds, the SEC said. Tens of millions of the nearly $100 million raised are unaccounted for, the agency added. On October 28, 2020, BKCoin petitioned for the appointment of a receiver in the Circuit Court for the 11th Judicial Circuit in Miami, the SEC complaint said.

Bison Digital LLC has been named as a relief defendant in the case because it received about $12 million from BKCoin and the funds, the SEC said.

The complaint seeks permanent injunctions against both of the defendants; disgorgement, prejudgment interest and a civil penalty from both of the defendants; and, an officer and director bar and conduct-based injunction against Kang, the SEC said.

Kang is a chartered financial analyst but is not registered with the SEC and holds no securities licenses, the agency said in its complaint.

BKCoin Management reported that it had about $70 million in assets under management in its most recent ADV filing on March 29, 2020, the SEC said. During the time period covered by the alleged scheme, BKCoin served as the investment advisor to the BKCoin funds and separately managed accounts for individuals and institutional investors, the SEC said.

Neither Kang nor representatives of BKCoin could be reached for comment.