[F]rom 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.

According 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. 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. 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. 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 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.

FINRA Fines and Suspends Rep For Receiving Unemployment Benefits
In the Matter of Joseph Louis Menotti, Respondent (FINRA AWC 2022075173701)
For the purpose of proposing a settlement of rule violations alleged by the Financial Industry Regulatory Authority ("FINRA"), without admitting or denying the findings, prior to a regulatory hearing, and without an adjudication of any issue, Joseph Louis Menotti submitted a Letter of Acceptance, Waiver and Consent ("AWC"), which FINRA accepted. The AWC asserts that Joseph Louis Menotti was first registered in. In accordance with the terms of the AWC, FINRA imposed upon Joseph Louis Menotti a $10,000 fine and a nine-month suspension from associating with any FINRA member in all capacities. As alleged in part in the AWC:

In 2020, as a result of the COVID-19 pandemic, the federal government established Pandemic Unemployment Assistance (PUA) for individuals who were ineligible for regular unemployment benefits and were unable to work due to the pandemic. The PUA program generally prohibited PUA benefits to individuals who were teleworking with pay.

In May 2020, Menotti applied for PUA benefits through the Michigan Unemployment Insurance Agency (Michigan UIA), despite the fact that he was earning a salary while teleworking.

Between May and July 2020, Menotti submitted 18 certifications claiming PUA benefits for each week from March 8, 2020, through July 11, 2020. In each certification, Menotti recklessly misrepresented that he did not work full time during the week he requested benefits. In 17 certifications, Menotti also recklessly misrepresented that he did not "do any type of work" or "have any earnings" during the week he requested benefits. In fact, during this period, Menotti was employed full-time by Edward Jones as a registered representative and received a salary.

Based on Menotti's misrepresentations, the Michigan UIA approved Menotti's application for PUA benefits. Menotti received more than $11,000 in PUA benefits to which he was not entitled. Menotti has repaid $1,570 to the Michigan UIA.

In April 2022, Edward Jones commenced an investigation of Menotti's receipt of PUA benefits and terminated Menotti's employment in May 2022. The Michigan UIA also determined that Menotti had not been eligible to receive PUA benefits and that he was improperly paid more than $11,000 in benefits.

Based on the foregoing, Menotti violated FINRA Rule 2010.