The U.S. Securities and Change Fee (SEC) accused cryptocurrency startup Unicoin and its prime executives of orchestrating a large fraud scheme.
The SEC alleges that they raised greater than $100 million from 1000’s of traders utilizing false guarantees about asset-backed tokens and inflated fundraising numbers.
A crypto dream constructed on illusions?
The SEC’s 77-page grievance, filed Might 20 within the Southern District of New York, facilities on a scheme allegedly masterminded by CEO Alex Konanykhin and senior executives Silvina Moschini and Alex Dominguez.
The SEC claims Unicoin misled over 5,000 traders by advertising and marketing “rights certificates” as protected, asset-backed investments, promising that the underlying tokens have been secured by billions of {dollars} in actual property and fairness property. In actuality, the property backing these guarantees have been valued at only a fraction of what Unicoin marketed.
“We allege that Unicoin and its executives exploited 1000’s of traders with fictitious guarantees,” mentioned Mark Cave, Affiliate Director at SEC Enforcement. “Nearly all of the corporate’s gross sales of rights certificates have been illusory.”
From billion-dollar claims to fractional realities
The SEC’s investigation revealed stark discrepancies between Unicoin’s claims and actuality. Regardless of boasting $3 billion in gross sales, the SEC says Unicoin raised not more than $110 million. Furthermore, the tokens, portrayed as totally SEC-registered, have been by no means formally registered, compounding accusations of deceptive retail traders.
CEO Alex Konanykhin personally bought practically 38 million rights certificates, focusing on traders in any other case barred by firm guidelines. The SEC alleges that these actions straight violated federal securities legal guidelines.
Unicoin’s aggressive advertising and marketing techniques at the moment are underneath intense scrutiny. The corporate ran splashy ads on 1000’s of New York Metropolis taxis, airport screens, televisions, and social media platforms, selling its tokens as safe investments tied to substantial real-world property.
The SEC cites these widespread advertising and marketing campaigns as proof of misleading intent. Unicoin launched alongside a Shark Tank-style TV present, Unicorn Hunters, that includes Apple co-founder Steve Wozniak and political advisor Moe Vela, who spoke to CryptoSlate on the time.
Konanykhin responded defiantly, arguing the SEC’s intervention derailed the corporate’s development trajectory. “We’d seemingly be a $10B+ publicly traded firm by now if the SEC had not blocked our ICO,” he advised Decrypt, describing the costs as a politically motivated transfer orchestrated by “rogue officers” left over from former SEC Chair Gary Gensler’s administration.
Regulatory strain in a shifting SEC surroundings
This case emerges as a pivotal take a look at of the SEC’s enforcement urge for food underneath Chair Paul Atkins, broadly considered as adopting a softer stance on cryptocurrency. Nevertheless, the Unicoin prices counsel that vital retail fraud, notably involving exaggerated asset claims, stays squarely throughout the regulator’s sights.
Notably, Unicoin’s normal counsel, Richard Devlin, has reportedly already settled with the SEC, agreeing to a everlasting injunction and paying a $37,500 penalty. This settlement hints at doable fractures inside Unicoin’s protection technique because the authorized battle unfolds.
The SEC seeks to completely bar Konanykhin, Moschini, and Dominguez from holding officer or director positions, alongside monetary penalties and disgorgement of positive factors. The extent of investor losses stays unclear, and the early phases of litigation may see Unicoin try and countersue or request venue adjustments.
The result of this case raises questions over the long run regulatory therapy of asset-backed tokens and influences ongoing congressional discussions about potential crypto carve-outs.
Chronology of Occasions
- Dec 2024: SEC points Wells discover to Unicoin.
- Apr 18, 2025: Settlement assembly scheduled; firm no-shows.
- Apr 22, 2025: CEO Konanykhin publicly rejects settlement provide.
- Might 20, 2025: SEC formally information grievance.
With billions at stake and reputations on the road, Unicoin’s unfolding authorized drama will reveal how far regulators will go to cut back crypto regulation, whether or not flashy advertising and marketing is now viable once more, whether or not crypto is again within the ‘wild west’, and whether or not the SEC will make an instance of Unicoin.
CryptoSlate has reached out to a number of members of the Unicoin staff however obtained no response as of press time.