SEC charges Unicoin crypto platform over alleged $100 million fraud

The US Securities and Exchange Commission (SEC) filed a lawsuit against Unicoin, a crypto investment platform, and three of its executives: CEO Alex Konanykhin, board member Silvina Moschini, and former investment chief Alex Dominguez. The SEC alleges that the defendants defrauded over 5,000 investors by making false and misleading statements about their crypto assets, raising over $100 million.

The complaint, filed in a Manhattan federal court, details multiple instances of alleged misrepresentation. The SEC claims Unicoin falsely portrayed its financial health, claiming decades of financial runway when, in reality, it often operated with less than a year, sometimes only four months, of funds. The company allegedly inflated its sales figures, claiming over $3 billion in rights certificate sales when the actual amount was closer to $110 million. Furthermore, Unicoin allegedly falsely advertised its tokens and certificates as SEC-registered.

The SEC’s complaint highlights the deceptive nature of Unicoin’s offerings. It alleges that the company falsely promised that its tokens, upon issuance, would be backed by real-world assets, including a significant international real estate portfolio. The SEC contends that the real estate assets were vastly undervalued, and a substantial portion of the company’s sales of rights certificates were essentially illusory. This deceptive marketing strategy, according to the SEC, actively exploited thousands of investors.

The SEC also charged Unicoin’s general counsel, Richard Devlin, with violating federal securities laws. Devlin paid a $37,500 civil penalty without admitting or denying the agency’s claims. The lawsuit seeks permanent injunctive relief and the return of the allegedly ill-gotten gains. Unicoin, Konanykhin, and Moschini have not yet responded to requests for comment, while Dominguez remains unreachable. This action follows a December Wells notice issued to Unicoin regarding a token airdrop and an April 18th settlement negotiation offer that the company refused. The SEC’s lawsuit underscores the increasing scrutiny of the cryptocurrency industry and the agency’s commitment to protecting investors from fraudulent activities.