TLDR
- SEC filed fraud charges against Unicoin and executives for misleading over 5,000 investors
- Company allegedly raised $110 million through false claims about asset backing and registration
- Unicoin falsely claimed its tokens were registered with the SEC and inflated the amount raised ($3 billion vs actual $110 million)
- Executives allegedly overstated real estate holdings value ($1.4 billion claimed vs. actual $300 million maximum)
- CEO Alex Konanykhin rejected settlement offers and vows to fight charges in court
SEC Lawsuit Claims Unicoin Misled Investors with False Promises
The U.S. Securities and Exchange Commission has charged New York-based crypto company Unicoin and three of its top executives with securities fraud.
The charges, filed on Tuesday in the Southern District of New York, allege the company misled over 5,000 investors while raising more than $110 million through false claims about crypto asset offerings.
The SEC complaint names CEO Alex Konanykhin, board member Silvina Moschini, and former Chief Investment Officer Alex Dominguez as key figures in promoting “rights certificates” tied to Unicoin tokens through allegedly false statements. The company’s general counsel, Richard Devlin, was also charged for misleading statements in private placement memoranda.
Devlin has agreed to pay a $37,500 penalty and accept a permanent injunction without admitting wrongdoing. The other executives have not settled with the regulator.
According to the SEC, Unicoin falsely claimed its tokens were registered with the agency when they were not. The company also allegedly stated it had raised $3 billion in rights certificate sales, when the actual figure was just over $110 million.
Real Estate Claims Under Scrutiny
Mark Cave, associate director in the SEC’s Division of Enforcement, stated that Unicoin “exploited thousands of investors with fictitious promises that its tokens would be backed by real-world assets including an international portfolio of valuable real estate holdings.”
The SEC alleges that between September 2023 and January 2024, Unicoin announced acquisitions of properties in Argentina, Thailand, Antigua, and the Bahamas. These properties were purportedly worth more than $1.4 billion combined.
However, regulators claim the majority of these transactions never closed. The actual combined value of the four properties was no more than $300 million, according to the complaint.
The SEC further alleges that Konanykhin personally sold nearly 38 million certificates to investors who were otherwise barred from participating in the offering.
Unicoin conducted a widespread marketing campaign to promote the offering as a secure investment. Advertisements appeared in airports, taxis, ferries, office building elevator screens, digital billboards, television programs, and news websites.
Some promotional materials touted potential returns of up to 9,000,000%, based on Bitcoin’s growth over the past decade. Marketing urged investors to “take advantage of the early days of Unicoin” and highlighted how “Bitcoin experienced a tremendous rise in value, transforming early adopters into millionaires, and even billionaires.”
The case comes as the SEC, under the Trump administration, has retreated from several high-profile crypto enforcement actions. Recent cases against companies like Coinbase, Ripple, Kraken, and Consensys have been dropped amid a shift away from the more aggressive regulatory stance taken by the previous administration.
Konanykhin has vowed to contest the charges in court. In April, he told Decrypt, “I fully intend to win this case in the courtroom. It’s grotesque that the most compliant crypto company in the U.S. remains the only one being persecuted by the SEC.”
The CEO has argued that the lawsuit does not represent the views of the current SEC leadership.
“This is being driven by rogue officials left over from the Gensler administration who are trying to cover themselves by bullying us into a false admission of guilt,” Konanykhin said.
Unicoin received a Wells notice from the SEC last December, informing the company that the regulator—then under the leadership of former Chair Gary Gensler—intended to file securities fraud charges.
Last month, Konanykhin sent a letter to Unicoin’s shareholders, informing them that the company had rejected the SEC’s attempt to settle the charges. He described it as an “ultimatum” to attend a settlement negotiation meeting by April 18.
“We declined to show up,” Konanykhin told CoinDesk in an April interview, adding that the SEC had made pre-meeting demands he deemed “unacceptable” and claiming that the SEC’s probe had caused “multi-billion-dollar damages” to the company.
The SEC is seeking injunctive relief, disgorgement, and civil penalties against all named defendants, as well as officer-and-director bans for the three senior executives.
A spokesperson for Unicoin previously stated that the company is “the only fully U.S.-registered, U.S.-regulated, U.S.-audited, and U.S.-publicly reporting cryptocurrency company” and has “consistently complied with all regulations.”
The SEC’s filing on Tuesday represents the latest development in this ongoing dispute between the regulator and Unicoin.
