The US SEC has brought serious fraud charges against Unicoin and its top executives, alleging they orchestrated a massive crypto scheme that raised over $100 million from thousands of unsuspecting investors. Filed on Tuesday, the complaint accuses Unicoin CEO Alex Konanykhin, former president Silvina Moschini, and former CIO Alex Dominguez of orchestrating a deceptive offering campaign over more than two years.
According to the SEC’s allegations, Unicoin promised investors a “next-generation” crypto asset backed by billions of dollars in real estate. In reality, those backing assets were either significantly inflated or never existed.
The agency states that the company made a series of false and misleading statements from February 2022 to the present. These claims included that a multi-billion-dollar real estate portfolio secured Unicoin tokens. The actual value of those holdings was only a small fraction of what was publicly advertised.
Over 5,000 Investors Involved in the Scam
The SEC’s complaint outlines Unicoin’s coordinated and high-profile promotional campaign, which included advertisements in major airports, New York City taxis, television broadcasts, and an aggressive social media presence.
These marketing efforts allegedly convinced more than 5,000 retail investors to purchase rights certificates, which are described as a safer alternative to volatile cryptocurrencies. Unicoin claimed it had sold over $3 billion worth of these certificates; however, the SEC found the actual proceeds amounted to just $110 million.
Further scrutiny reveals deeper issues with Unicoin’s operations. The SEC says the company misrepresented its offerings as being registered with them and created a layer of false credibility that likely influenced investor decisions.
The complaint also accuses Konanykhin of exploiting registration exemptions. He allegedly exploited registration exemptions by selling nearly 38 million of his own rights certificates at discounted rates to investors previously excluded due to regulatory concerns.
Unicoin Faces Huge Penalties
The regulator is now seeking different penalties for Unicoin, including permanent injunctions, the return of illicit gains with interest, and the imposition of civil fines. There will also be lifetime bans on serving as officers or directors of public companies for the accused executives. The charges don’t stop at the company’s founders. Richard Devlin, Unicoin’s general counsel, is also named in the filing. While not admitting guilt, Devlin has agreed to a final judgment requiring him to pay a $37,500 civil penalty and submit to injunctive relief.
Unlike earlier enforcement actions focused on unregistered token distributions, this case has a different model of alleged fraud. It is not like the Kik and Telegram cases against the SEC. This case involves selling unregistered securities disguised as asset-backed rights certificates. The Unicoin case illustrates the SEC’s changing approach to tackling crypto-related fraud. It also shows the use of traditional marketing methods to prop up digital asset schemes built on fictional promises.Â
As the investigation continues, Unicoin’s downfall may serve as another warning to investors and an example for those who love flashy campaigns in the unregulated corners of the crypto market.Â
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