The U.S. Securities and Change Fee (SEC) accused cryptocurrency startup Unicoin and its high executives of orchestrating an enormous fraud scheme.
The SEC alleges that they raised greater than $100 million from hundreds of buyers 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 buyers by advertising “rights certificates” as protected, asset-backed investments, promising that the underlying tokens had been secured by billions of {dollars} in actual property and fairness belongings. In actuality, the belongings backing these guarantees had been valued at only a fraction of what Unicoin marketed.
“We allege that Unicoin and its executives exploited hundreds of buyers with fictitious guarantees,” mentioned Mark Cave, Affiliate Director at SEC Enforcement. “The vast majority of the corporate’s gross sales of rights certificates had 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 absolutely SEC-registered, had been by no means formally registered, compounding accusations of deceptive retail buyers.
CEO Alex Konanykhin personally bought almost 38 million rights certificates, focusing on buyers in any other case barred by firm guidelines. The SEC alleges that these actions straight violated federal securities legal guidelines.
Unicoin’s aggressive advertising techniques are actually beneath intense scrutiny. The corporate ran splashy commercials on hundreds of New York Metropolis taxis, airport screens, televisions, and social media platforms, selling its tokens as safe investments tied to substantial real-world belongings.
The SEC cites these widespread advertising 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 possible be a $10B+ publicly traded firm by now if the SEC had not blocked our ICO,” he instructed Decrypt, describing the fees as a politically motivated transfer orchestrated by “rogue officers” left over from former SEC Chair Gary Gensler’s administration.
Regulatory stress in a shifting SEC surroundings
This case emerges as a pivotal check of the SEC’s enforcement urge for food beneath Chair Paul Atkins, extensively considered as adopting a softer stance on cryptocurrency. Nonetheless, the Unicoin fees counsel that vital retail fraud, significantly involving exaggerated asset claims, stays squarely inside the regulator’s sights.
Notably, Unicoin’s common 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 potential 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 aspects. The extent of investor losses stays unclear, and the early levels of litigation might see Unicoin try to countersue or request venue adjustments.
The result of this case raises questions over the longer term regulatory remedy 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 recordsdata grievance.
With billions at stake and reputations on the road, Unicoin’s unfolding authorized drama will reveal how far regulators will go to scale back crypto regulation, whether or not flashy advertising 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 group however obtained no response as of press time.
