SEC charges Unicoin crypto platform over alleged $100 million fraud

Update May 21, 4:32 am UTC: This article has been updated to add more information from the SEC’s complaint.

The US Securities and Exchange Commission has sued crypto investment platform Unicoin and three of its executives, alleging they made false and misleading statements about their crypto assets that raised over $100 million from investors.

The SEC said on May 20 that it charged Unicoin CEO Alex Konanykhin, board member Silvina Moschini and former investment chief Alex Dominguez with misleading over 5,000 investors about certificates that conveyed rights to receive Unicoin tokens and stock.

SEC Division of Enforcement associate director Mark Cave claimed that starting in 2022, the trio “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.”

“The real estate assets were worth a mere fraction of what the company claimed, and the majority of the company’s sales of rights certificates were illusory,” Cave added.

The SEC’s complaint, filed in a Manhattan federal court, charged Unicoin and the three executives with various securities laws violations and asks for permanent injunctive relief, along with paying back the allegedly ill-gotten gains.

Among the SEC’s allegations, the agency alleged Unicoin misrepresented its financial situation and told investors it had decades of financial runway when it was generally under a year and, at some points, was “no more than four months.”

The SEC alleged that Unicoin claimed to have sold more than $3 billion in rights certificates when the company had only sold $110 million, and that the tokens and certificates were falsely advertised as SEC-registered.

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 claim.

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Unicoin, Konanykhin and Moschini did not immediately respond to a request for comment. Dominguez could not immediately be reached for comment.

Former FOX Business reporter Eleanor Terrett reported on April 21 that Unicoin received an SEC Wells notice in December over a token airdrop and was asked to attend a settlement negotiation with the SEC on April 18.

Konanykhin told Terrett that his company declined the meeting on the grounds that some of the regulator’s requests for the meeting were unacceptable and would fight the case in court.

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