SEC Charges Unicoin, Top Executives With $100M ‘Massive Securities Fraud’

The U.S. Securities and Exchange Commission sued crypto firm Unicoin and three executives on Tuesday evening on fraud costs, saying the corporate raised over $100 million for tokens that weren’t truly backed by the actual property its executives claimed.

The SEC sued Unicoin, CEO Alexander Konanykhin, former board chair Maria Moschini, senior vice chairman and basic counsel Richard Devlin and former chief funding officer and investor relations officer Alejandro Dominguez on securities regulation violations,

Among its allegations, the SEC stated Unicoin by no means truly owned the actual property properties it advised traders it had acquired, and that these properties’ values had been inflated.

“For example, between September 2023 and January 2024, the Promoting Defendants announced acquisitions of properties in Argentina, Thailand, Antigua, and the Bahamas, purportedly with appraised values totaling more than of $1.4 billion; in fact, the majority of those transactions never closed and the actual combined value of the four properties was no more than $300 million,” the grievance stated.

The defendants additionally “overstated the Company’s sales” of its rights certificates, suggesting in social media posts and to traders that it had raised way more funds than it truly had, the SEC alleged. While Unicoin claimed it had made $3 billion in gross sales by June 2024, it truly by no means offered greater than $110 million in its rights certificates, in accordance with the grievance.

Moreover, Unicoin marketed its rights certificates, together with by promising outsized returns of as much as 9 million p.c, the SEC alleged, pointing to advertising efforts on taxi cabs, ferries, “office building elevator screens,” digital billboards, coasters, tv applications, information web sites and public wi-fi kiosks.

“Additional examples of the Promoting Defendants’ statements include: (a) social media and website posts that touted potential returns of 9,000,000% based on bitcoin’s 9,000,000% growth in the past 10 years and told investors to ‘take advantage of the early days of Unicoin and get them today,’ highlighting that ‘Bitcoin experienced a tremendous rise in value, transforming early adopters into millionaires, and even billionaires,'” the submitting stated.

Read extra: Unicoin CEO: Why Are We Still Under the SEC’s Gun?

Unicoin acquired a Wells discover from the SEC final December, informing the corporate that the regulator — then underneath the management of former Chair Gary Gensler — meant to file securities fraud costs. Last month, Konanykhin despatched a letter to Unicoin’s shareholders, informing them that the corporate had rebuffed the SEC’s try to settle the costs, rejecting what he described as an “ultimatum” to attend a settlement negotiation assembly by April 18.

“We declined to show up,” Konanykhin advised CoinDesk in an April interview, including that the SEC had made sure pre-meeting calls for he deemed “unacceptable” and claiming that the SEC’s probe had brought about “multi-billion-dollar damages” to the corporate.

Read extra: Unicoin CEO Reject’s SEC’s Attempt to Settle Enforcement Probe

Neither Konanykhin nor a spokesperson for Unicoin responded to CoinDesk’s request for remark by press time. In a press launch shared earlier this 12 months in response to a Wall Street Journal article, a spokesperson stated, “Unicoin, the only fully U.S.-registered, U.S.-regulated, U.S.-audited, and U.S.-publicly reporting cryptocurrency company, has consistently complied with all regulations.”

According to courtroom paperwork, the SEC is looking for disgorgement and civil penalties.