SEC Cracks Down on Unicoin, Targeting Crypto Firms and Exchanges

For years, the former SEC Chair aggressively pursued lawsuits against crypto firms and exchanges. Now, with Paul Atkins taking over, the regulatory approach appears to be changing.

The U.S. Securities and Exchange Commission (SEC) has hit token startup Unicoin and three executives with charges of allegedly defrauding investors and misrepresenting a crypto token offering that raised over $100 million.

The regulator said in a statement that it had reached a settled agreement with the company’s general counsel.

In a complaint filed on Thursday in the Southern District of New York, the SEC named CEO Alex Konanykhin, board member Silvina Moschini, and former Chief Investment Officer Alex Dominguez.

The agency claimed that they promoted “rights certificates” that would be exchangeable for Unicoin tokens with false and misleading statements to raise the funds.

The SEC also said that Richard Devlin, the company’s general counsel, prepared and caused the company to issue private placement memoranda that contained false and misleading statements about the company’s business and operations.

Devlin, who did not admit to or deny any wrongdoing, agreed to pay a $37,500 penalty and accept a permanent injunction.

Commenting on the same, Mark Cave, Associate Director in the SEC’s Division of Enforcement, said,

“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.”

He added,

“But as we allege, the real estate assets were worth a mere fraction of what the company claimed, and the company misrepresented the stages of development of its blockchain platform.”

The SEC’s complaint highlights how Unicoin induced investors to participate in the offering by making false and misleading statements about the company, the offering, and the terms and conditions of the offering.

The company claimed to have sold over $3 billion worth of rights certificates, but the actual amount sold was approximately $110 million.

Furthermore, Unicoin falsely stated that its offerings were registered with the SEC and that its token would be issued in accordance with the terms described in the rights certificates.

To reach a broad audience, Unicoin ran high-visibility advertising campaigns in airports, taxis, TV, and social media.

The company’s public statements and advertisements deceived investors into believing that Unicoin was a large, well-established company with significant assets and revenue streams.

However, the SEC said that Unicoin was a small, private company with limited assets and no revenue.

The company’s actions and statements induced over 5,000 investors to purchase the rights certificates.

This follows a year of heightened scrutiny from the SEC, which saw the agency become actively involved in settling cases with major crypto firms.

The regulator had major legal battles with Coinbase (NASDAQ:COIN), ConsenSys, MetaMask, and even Ripple [XRP], which finally concluded its four-year courtroom saga.

However, despite the reduced tensions, the SEC remains vigilant in its regulatory oversight.output: For years, the former SEC Chair aggressively pursued lawsuits against crypto firms and exchanges.

Now, with Paul Atkins taking over, the regulatory approach appears to be changing.

The SEC resolved major legal battles involving Coinbase, ConsenSys, MetaMask, and even Ripple [XRP], which finally concluded its four-year courtroom saga.

Despite the reduced tensions, the SEC remains vigilant in its regulatory oversight.

Unicoin attacked by the SECin a fresh crackdown, the SEC charged Unicoin and three top executives with misleading investors and raising over $100 million through deceptive claims.

This shows that while the regulatory climate may be shifting, intense scrutiny remains.

In a recent complaint filed in the Southern District of New York, the SEC targeted Unicoin’s leadership.

The agency alleged that CEO Alex Konanykhin, board member Silvina Moschini, and former Chief Investment Officer Alex Dominguez promoted “rights certificates” linked to Unicoin tokens using false or misleading claims.

These certificates were sold to raise over $110 million, aiming for an eventual exchange for Unicoin tokens, the complaint noted.

The regulator also 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.

Remarking on the same, Mark Cave, Associate Director in the SEC’s Division of Enforcement, said in a statement,

“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.”

He added,

“But as we allege, the real estate assets were worth a mere fraction of what the company claimed, and the company misrepresented the stages of development of its blockchain platform.”

The story so far…The SEC’s complaint highlights how Unicoin misled