The US Securities and Exchange Commission (SEC) has filed a lawsuit against Unicoin, a New York-based company, and four of its executives, accusing them of securities fraud and misleading thousands of investors during a major fundraising effort.
SEC Vs Unicoin
The complaint, lodged in the Southern District of New York, names CEO Alex Konanykhin, Director Silvina Moschini, former CIO Alex Dominguez, and General Counsel Richard Devlin. The SEC alleges that the company and its leadership misrepresented the value and security of so-called “equity certificates,” which were promoted as future rights to a cryptocurrency token called Unicoin.
According to the SEC, Unicoin engaged in an aggressive public marketing campaign that included TV ads, social media posts, airport billboards, and taxi advertisements across New York City. These efforts allegedly convinced over 5,000 investors to purchase equity certificates based on inflated claims.
The key allegations are:
- Unicoin claimed the certificates were backed by billions in real estate and pre-IPO equity, though its actual assets were worth only a fraction of that.
- The company stated it had raised over $3 billion, when it had raised no more than $110 million.
- Unicoin and its tokens were falsely advertised as “SEC-registered” or “US registered.”
Additionally, Konanykhin is accused of personally selling over 37.9 million certificates at a discounted rate to ineligible investors, violating securities registration laws. The SEC also holds him responsible as a “control person” for the company’s fraudulent actions.
The lawsuit seeks permanent injunctions, repayment of ill-gotten gains with interest, civil penalties, and bans preventing the executives from serving as officers or directors of public companies. Devlin, the general counsel, has agreed to settle with the SEC, paying a $37,500 civil penalty without admitting or denying the allegations.
“We allege that Unicoin and its executives exploited investors with fictitious promises backed by vastly overstated assets,” said Mark Cave, Associate Director of the SEC’s Division of Enforcement. “This action aims to hold those responsible accountable.”
The SEC’s investigation and legal proceedings are ongoing.
Separately, the US government has urged a federal judge to impose a two-year prison sentence on Eric Council Jr., who played a role in spreading false information about the approval of a spot Bitcoin ETF by the SEC via its official X account. The filing alleged that Council had posted a fraudulent message on X in January 2024, falsely claiming the SEC had authorized the first-ever spot Bitcoin ETF.
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