SEC Charges Unicoin, Inc. and Its Senior Leadership with Deceptive Investor Practices

The US Securities and Exchange Commission (SEC) has charged Unicoin, Inc. and its senior leadership with deceiving investors

The US Securities and Exchange Commission (SEC) has charged Unicoin, Inc and its senior leadership with allegedly deceiving investors through exaggerated fundraising claims and false assurances about their crypto token.

The SEC’s lawsuit, filed on Wednesday, alleges that Unicoin’s reported capital raise and asset backing were significantly overstated, and its statements about the SEC registration of its token offering were false.

This action is part of a broader effort by federal regulators to increase scrutiny of the crypto industry and enforce securities laws within the rapidly evolving digital asset market.

As the case unfolds, various perspectives are emerging in public discussions, highlighting the points of contention between regulators and company leaders.

What SEC Is Claiming

The SEC has filed an enforcement action against Unicoin, Inc, several top executives, and brought a part of the case in the federal court in New York.

According to the SEC’s press release, the agency alleges that Unicoin made false and misleading statements to investors about its crypto token, which was being sold in a purported SEC-registered offering.

The complaint claims that Unicoin’s reported capital raise was “grossly exaggerated.” While Unicoin publicly stated it had raised $3 billion, the SEC’s investigation found that “only ~$110 million was raised, not $3 billion as advertised.”

In addition, there is insufficient evidence for claims that the token was backed by billions in real estate, as asserted by Unicoin’s leadership.

“The SEC has charged Unicoin and execs including CEO Alex Konanykhin and Silvina Moschini for allegedly defrauding 5,000+ investors with false and misleading claims that its crypto token was backed by billions in real estate. SEC says only ~$110 million raised, not $3 billion as advertised,” Eleanor Terrett, a legal writer, noted on X, formerly Twitter.

More than 5,000 investors may have relied on these false statements in making their investment decisions.

The SEC’s complaint also alleges that Unicoin’s token offering was not registered with the SEC, as the company repeatedly claimed in its public statements. The agency said that the company’s assertions regarding the registration status were false.

The SEC’s investigation is ongoing, and the agency is seeking a range of legal remedies, including permanent injunctions, civil penalties, and a ban on the company’s executives from serving as officers or directors of public companies.

“Unicoin’s most senior executives are alleged to have perpetuated the fraud, and today’s action seeks accountability for their conduct,” said Mark Cave, Associate Director in the SEC’s Division of Enforcement.

Questions About Asset Backing, Regulatory Status Fabricated: SEC

The SEC’s filings detail how Unicoin allegedly presented its token as being tied to a substantial portfolio of real estate assets, which would serve to protect investor funds. These promises, critical in an industry where large-scale claims can sway investor sentiment, were either false or significantly exaggerated, the SEC alleges.

Similarly, the SEC’s complaint asserts that Unicoin misrepresented the regulatory status of its token sale. The SEC argues that the offering was not registered as required by the federal securities laws, despite suggestions to the contrary in public statements by Unicoin. This, regulators claim, created a misleading impression of legitimacy and safety that may have been a factor in drawing in investors.

These allegations speak to a recurring problem that federal authorities have highlighted in their scrutiny of crypto fundraising.

After the SEC's complaint, executives at Unicoin quickly responded, denying the allegations.

CEO Alex Konanykhin maintains that his company acted appropriately and welcomes the chance to defend Unicoin against the claims brought by the US Securities and Exchange Commission (SEC).

"The SEC charges are crudely fabricated. We will defend the company and clear my name in court," Konanykhin said in a statement on Wednesday.

Konanykhin's public statements reflect his previous responses in interviews, where he consistently rejected any suggestion of wrongdoing.

As the case progresses, the next developments are likely to emerge through legal proceedings, where both sides will present their evidence.