Crypto Hedge Fund Fired its Co-Founder over this Allegation

BKCoin’s co-founder Kevin Kang misappropriated investor funds thus the crypto hedge fund fired him.
The firm has deleted its official twitter account.

BKCoin Capital, a cryptocurrency hedge fund, fired its co-founder Kevin Kang. There is an ongoing case in a Florida district court that alleges that Kang misused $12 Million of investor assets.

According to filings with U.S. Circuit Court in Florida, Crypto hedge fund BKCoin fired its co-founder in October for allegedly misappropriating $12 Million in assets from three multi-strategy funds. The documents, in the 11th circuit court covering Miami-Dade County, date back to Oct. 28 but went largely unnoticed.

The crypto hedge BKCoin was founded in 2018 by Carlos Betancourt and Kang. According to a Business Insider profile in June they have claimed $150 Million in assets. The firm manages at least five funds – including three multi-strategy funds – and multiple separately managed accounts.

Additionally, the multi-strategy funds at the heart of the court case have six U.S. and foreign businesses as its investors, which have combinedly invested more than $18 Million. As per the court documents, they now hope to recover.

Moreover, on Oct. 28, its core legal entity, BKCoin Management LLC, filed a complaint with the circuit court. The filing alleged that Kang had improperly diverted and/or commingled $12 Million in cash and other assets out of the multi-strategy funds. Then the crypto hedge terminated Kang’s employment on Oct. 14 but wasn’t sure if he still had access to the accounts.

It must be noted that the crypto hedge filed an emergency petition for a receiver, a court-appointed neutral party who is given custody of disputed assets.

BKCoin claimed that it is lacking the financial or staff resources to manage the funds itself. After this, Michael I. Goldberg, a lawyer from the firm Ackerman LLP, was quickly appointed as a temporary receiver tasked with supervising and winding up the funds.

In the preliminary investigation of Goldberg at the assets signified that capital deposited in the multi-strategy funds on behalf of investors was immediately transferred into the accounts of three affiliated legal entities and combined with their assets. And those entities were BKCoin Management LLC, BKCoin Capital LP and BK Offshore Fund Ltd – that reportedly were at some point under Kang’s control.

The court expanded Goldberg’s view to cover those entities and then confirmed his power to transfer any crypto assets to a depository account and/or to liquidate (or convert cryptocurrency into U.S. dollars), if needed to preserve value.

Now, Goldberg needs to submit a report to the court on or before Jan. 4. It needs to outline the steps taken, along with the amounts of all assets and liabilities of the funds and affiliated entities and whether he thinks the funds could continue to operate in a legal and profitable fashion.

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing