SEC Charges Unicoin Inc. Executives in $100 Million Crypto Fraud

The US Securities and Exchange Commission has taken action against New York-based Unicoin Inc. and its executives, charging them with orchestrating a $100 million fraud. The SEC's complaint alleges that Unicoin and its executives misled over 5,000 investors through false claims about crypto asset offerings and company stock. The fraudulent scheme involved promoting so-called "rights certificates" tied to Unicoin tokens, which were falsely presented as secure investments backed by real-world assets, including an international portfolio of valuable real estate holdings. In reality, the assets were worth only a fraction of what the company claimed.

The SEC's complaint names Unicoin CEO Alex Konanykhin, board member Silvina Moschini, and former Chief Investment Officer Alex Dominguez as key figures in the fraud. The complaint also targets the company's general counsel, Richard Devlin, 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 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.

The fraudulent marketing campaign employed by Unicoin was extensive, with ads placed in airports, taxis, and on television to attract investors. The company falsely claimed that its tokens were registered with the SEC and that it had raised $3 billion in rights certificate sales, when in fact it had raised just over $110 million. Konanykhin personally sold nearly 38 million certificates to investors who were otherwise barred from participating.

Mark Cave, associate director in the SEC’s Division of Enforcement, emphasized the agency's commitment to holding companies and their executives accountable for misleading investors. "We allege that Unicoin and its executives exploited thousands of investors with fictitious promises that its tokens, when issued, would be backed by real-world assets including an international portfolio of valuable real estate holdings," Cave stated.

Konanykhin has vowed to contest the charges in court, arguing that the lawsuit does not represent the views of the current SEC leadership. He claims that the case is being driven by rogue officials left over from the previous administration who are trying to bully the company into a false admission of guilt. Despite his defiance, the SEC remains steadfast in its pursuit of justice for the thousands of investors who were misled by Unicoin's fraudulent scheme. The outcome of this case will set a precedent for future crypto enforcement actions and underscore the importance of transparency and accountability in the industry.