![]() ![]() The leisure industry has taken a battering during Covid, and many businesses have fallen by the wayside. In this interview, we discuss how a desire to revive a local bar after Covid inspired the establishment of Pubkey, its importance as a focal point for Bitcoin in New York City, and how its success could inspire more Pubkeys in more cities. ![]() Investors can find additional information about crypto asset investment schemes, including the warning signs of fraud, at Pacchia is a Bitcoin entrepreneur and the co-owner of Pubkey, a Bitcoin bar in New York City. The SEC’s Office of Investor Education and Advocacy and Enforcement’s Retail Strategy Task Force has issued an Investor Alert on Digital Asset and Crypto Investment and an Investor Alert on Pyramid Schemes Posing as Multi-Level Marketing Programs. The SEC’s litigation is being led by Pascale Guerrier under the supervision of Teresa Verges. Gordon with assistance from Adrian Gonzalez, James Richardson, and Jean Cabot. The SEC’s continuing investigation is being conducted by Alexander Charap, Jeffrey Goldberg, and Julia D’Antonio in the Miami Regional Office under the supervision of Jessica M. ![]() The court also granted emergency relief against the relief defendants, which the SEC sought, including appointment of a receiver. The complaint names as relief defendants, and seeks disgorgement from, each of the funds and Bison Digital LLC, an entity that allegedly received approximately $12 million from BKCoin and the funds. 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’s complaint, filed in the United States District Court for the Southern District of Florida, alleges that BKCoin and Kang violated the antifraud provisions of the federal securities laws. “This action highlights our continued commitment to protecting investors and uprooting fraud in all securities sectors, including the crypto asset arena.” Bustillo, Director of the SEC’s Miami Regional Office. Instead, the defendants misappropriated their money, created false documents, and even engaged in Ponzi-like conduct,” said Eric I. “As we allege, investors entrusted their money to the defendants to trade in crypto assets. The complaint further alleges that BKCoin materially misrepresented to some investors that BKCoin, or one of the funds, received an audit opinion from a “top four auditor,” when in fact neither BKCoin nor any of the funds received an audit opinion at any time. According to the complaint, Kang attempted to conceal the unauthorized use of investor money by providing altered documents with inflated bank account balances to the third-party administrator for certain of the funds. The complaint also alleges that Kang misappropriated at least $371,000 of investor money to, among other things, pay for vacations, sporting events tickets, and a New York City apartment. As the complaint alleges, 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. From at least October 2018 through 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 Ponzi-like payments and for personal use.Īccording to the SEC’s complaint, filed under seal on February 23, 2023, and unsealed today, BKCoin and Kang assured investors that their money would be used primarily to trade crypto assets and represented that BKCoin would generate returns for investors through separately managed accounts and five private funds. The Securities and Exchange Commission today announced that it filed an emergency action in which it successfully obtained an asset freeze, appointment of a receiver, and other emergency relief against Miami-based investment adviser BKCoin Management LLC and one of its principals, Kevin Kang, in connection with a crypto asset fraud scheme. ![]()
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