SEC Sues Unicoin and Its Top Executives for $100M 'Massive Securities Fraud'

The U.S. Securities and Exchange Commission (SEC) on Tuesday night sued crypto company Unicoin and three of its top executives for fraudulent practices. The SEC alleges that Unicoin raised more than $100 million for tokens that were not backed by any real estate assets the executives claimed to own.

The Accusations

The SEC has CEO Alexander Konanykhin, former chairman Maria Moschini, senior vice president and general manager Richard Devlin, and former chief investment officer and investor relations officer Alejandro Dominguez have been charged with violating securities laws. The allegations include that Unicoin never actually acquired the properties it pitched to investors. In fact, the values ​​of those properties were allegedly artificially inflated.

Imagine, between September 2023 and January 2024, the individuals involved announced the purchase of properties in countries such as Argentina, Thailand, Antigua and the Bahamas. These transactions were said to have a combined value of more than $1,4 billion, but in reality most of these deals never closed, bringing the real value of the four properties to no more than $300 million.

Exaggerating the Numbers

In addition, the SEC found that the defendants exaggerated the sales of Unicoin’s so-called rights certificates. On social media and to investors, they led them to believe that the company had raised far more money than it actually did. While Unicoin claimed to have made $2024 billion in sales by June 3, in reality, it has never sold more than $110 million in rights certificates.

“Shouldn’t they have mentioned those numbers? It’s like a circus!”

In addition, Unicoin allegedly promoted its rights certificates with promises of exorbitant returns, as high as 9 million percent. The marketing efforts ranged from taxi ads to digital billboards and even television programs.

Wells Notice and Comments

In December of last year, Unicoin received a Wells notice from the SEC, informing the company that the regulator planned to file securities fraud charges. Last month, Konanykhin wrote a letter to Unicoin shareholders indicating that the company had rejected the SEC’s settlement offer, describing the effort as an “ultimatum” to appear for a negotiating meeting on April 18.

“We refused to go there,” Konanykhin said in an interview, adding that the SEC made unacceptable demands before the meeting took place.

The Future of Unicoin

None of the parties responded to requests for comment. In a press release shared earlier this year following a Wall Street Journal article, a spokesperson claimed that Unicoin “is the only fully registered, regulated, and audited cryptocurrency in the U.S.,” and that the company has consistently complied with all regulations.

The SEC has sought disgorgement of ill-gotten gains and civil penalties in its lawsuits. The future of Unicoin now hangs in the balance, and how this story will continue to unfold remains a mystery.

Frequently Asked Questions

What are the main allegations against Unicoin?
Unicoin is accused of fraudulent practices, including not owning the real estate assets presented to investors and exaggerating the turnover figures of their rights certificates.

How did Unicoin's management respond to the allegations?
CEO Alexander Konanykhin has rejected the SEC's settlement offer, claiming the demands are unacceptable.

What is the SEC looking for in the lawsuit against Unicoin?
The SEC is seeking disgorgement of ill-gotten gains and civil penalties against the company and its executives.