SEC Sues Unicoin Executives Over $100 Million Fraud

The U.S. Securities and Exchange Commission (SEC) has taken decisive action against Unicoin, a New York-based company, and three of its top executives. The SEC has filed a lawsuit alleging that Unicoin and its executives engaged in a $100 million securities fraud, misleading over 5,000 investors. The fraud involved the issuance of Unicoin tokens, which were falsely claimed to be backed by real assets and registered with the SEC. This case underscores the ongoing regulatory scrutiny of the cryptocurrency industry and the importance of transparency and compliance in token offerings.

The SEC's complaint, filed in the Southern District of New York, targets Unicoin’s leadership, including CEO Alex Konanykhin, board member Silvina Moschini, and former Chief Investment Officer Alex Dominguez. The agency alleges that these executives promoted “rights certificates” linked to Unicoin tokens using false or misleading claims. Additionally, the regulator accused the company’s general counsel, Richard Devlin, of issuing inaccurate statements in private placement memoranda. Although Devlin did not admit to any wrongdoing, he agreed to pay a $37,500 fine and accept a permanent injunction.

Mark Cave, Associate Director in the SEC’s Division of Enforcement, remarked, “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. But as we allege, the real estate assets were worth a mere fraction of what the company claimed.”

The SEC’s complaint highlights how Unicoin misled thousands of investors through deceptive marketing tactics. Despite claiming to have raised over $3 billion through rights certificate sales, the actual figure was closer to $110 million. Additionally, Unicoin falsely stated that its offerings were registered with the SEC, boosting investor confidence. The company promoted these false claims through high-visibility ads in airports, taxis, TV, and social media, attracting over 5,000 investors. Ultimately, these actions led the SEC to take enforcement measures against Unicoin.

This isn’t the first time Unicoin has faced scrutiny from the SEC. Last year, journalist Eleanor Terrett revealed that Unicoin received a Wells notice in December. Later, in April, the SEC summoned the company for settlement discussions, signaling growing regulatory pressure before formal charges were filed.

The SEC's action underscores its commitment to protecting investors from fraudulent activities in the digital asset space. The lawsuit serves as a reminder to companies and investors alike about the risks associated with unregistered and misleading token sales. The outcome of this case could set a precedent for future regulatory actions against similar fraudulent activities in the cryptocurrency market.