SEC Accuses Unicoin and Key Executives of $100 Million Major Securities Fraud

The U.S. Securities and Exchange Commission filed a lawsuit against the cryptocurrency firm Unicoin and three of its high-ranking officials on Tuesday evening, accusing them of fraudulent activities. The complaint alleges that the company collected over $100 million for tokens that were supposedly supported by real estate, which they did not actually possess.

The SEC’s legal action targets Unicoin, its CEO Alexander Konanykhin, former board chair Maria Moschini, senior vice president and general counsel Richard Devlin, and former chief investment officer Alejandro Dominguez, citing multiple breaches of securities regulations.

Among the claims made by the SEC, it was asserted that Unicoin had never legitimately owned the real estate assets it represented to investors, and it inflated the assessed values of these properties.

According to the complaint, between September 2023 and January 2024, the defendants publicized property acquisitions in Argentina, Thailand, Antigua, and the Bahamas, supposedly appraised at over $1.4 billion. However, most of these deals did not materialize, and the actual combined worth of the properties was estimated to not exceed $300 million.

The defendants allegedly exaggerated Unicoin’s sales figures of its rights certificates, using social media to imply that the fundraising totals were far higher than the real amounts. While claiming to have generated $3 billion in sales by June 2024, Unicoin reportedly sold less than $110 million in rights certificates, as detailed in the complaint.

Unicoin also promoted its rights certificates with claims of exceptionally high returns, promising up to 9 million percent, as stated by the SEC. The marketing efforts included advertisements on taxi cabs, ferries, digital billboards, coasters, TV shows, news websites, and public Wi-Fi locations.

Additionally, the SEC pointed out examples of the defendants’ communications, which included social media posts predicting returns of 9,000,000% based on Bitcoin’s growth and encouraging investors to seize early opportunities in Unicoin, claiming that early Bitcoin adopters became millionaires and billionaires.

In December of the previous year, Unicoin received a Wells notice regarding the SEC’s intention to press securities fraud charges, under the previous chair, Gary Gensler. Last month, Konanykhin communicated to Unicoin’s shareholders that the company had declined the SEC’s proposal for settlement, characterizing it as an “ultimatum” for attending a negotiation session.

“We decided not to participate,” Konanykhin told a media outlet in an interview, mentioning that the SEC had made specific pre-meeting requests he considered unacceptable and asserting that the SEC’s investigation led to “multi-billion-dollar damages” for the firm.

There was no response from Konanykhin or Unicoin representatives to requests for comment by press time. Earlier in the year, in response to a news article, a spokesperson stated, “Unicoin, as the only fully registered, regulated, audited, and publicly reporting cryptocurrency firm in the U.S., has consistently adhered to all regulations.”

The SEC is pursuing penalties and the return of funds as part of the legal proceedings according to court documents.