The US Securities and Exchange Commission (SEC) has filed fraud charges against Unicoin, a New York-based crypto exchange, and several of its top executives, including CEO Alex Konanykhin and former president Silvina Moschini.
The SEC alleges that Unicoin defrauded over 5,000 investors by misrepresenting the value of asset-backed securities and inflating sales figures through extensive promotional campaigns. The company claimed its tokens were backed by a valuable international portfolio of real estate holdings and private equity, purportedly raising over $3 billion through rights certificate offerings. However, the SEC's complaint states that Unicoin actually raised no more than $110 million, and the real estate assets were worth only a fraction of the claims made.
Promotional materials were circulated widely in airports, taxis, television, and social media, portraying the investments as secure and lucrative. Additionally, the SEC charged that Unicoin falsely claimed its offerings were registered or compliant with US regulations, contrary to actual circumstances. Konanykhin reportedly sold nearly 38 million rights certificates, including to investors initially excluded to maintain registration exemptions, violating securities laws.
The SEC is seeking permanent injunctions, civil penalties, disgorgement of ill-gotten gains, and prohibitions on the executives serving as officers or directors of public companies. Unicoin’s general counsel, Richard Devlin, has agreed to settle charges with a permanent injunction and a $37,500 civil penalty without admitting or denying wrongdoing.
Mark Cave, Associate Director of the SEC’s Division of Enforcement, emphasized that Unicoin exploited thousands of investors with fictitious promises relating to asset-backed tokens, undermining trust in crypto investments. The SEC’s crackdown follows a pattern of regulatory action against deceptive crypto practices, highlighting increased enforcement and calls for enhanced transparency in the industry.
Konanykhin has vehemently denied the allegations. The case underscores growing regulatory scrutiny and risks in digital asset markets, signaling that investors should exercise heightened caution.