SEC Charges Unicoin and Executives in Multi-Million Dollar Digital Asset Securities Fraud

In a significant regulatory action, the U.S. Securities and Exchange Commission (SEC) has filed charges against Unicoin Inc. and three of its top executives, alleging a multi-million dollar securities fraud scheme. The agency claims the New York-based company and its leaders deceived more than 5,000 investors by making false representations about “rights certificates” linked to a future Unicoin token. The core allegations center on vastly inflated claims regarding the value of assets supposedly backing the digital investment and misleading statements about its regulatory status.

Allegations of Misrepresentation

The SEC’s complaint, filed in the Southern District of New York, names Unicoin’s CEO and Chairman, Alex Konanykhin, along with former President Silvina Moschini and former Chief Investment Officer Alex Dominguez. According to regulators, the defendants engaged in a widespread marketing campaign – including advertisements in airports, taxis, and on television – that portrayed the rights certificates as a secure, next-generation digital asset. Investors were led to believe these certificates would convert one-for-one into Unicoin tokens upon issuance and were backed by substantial real-world assets.

Specifically, the SEC alleges three main areas of deception:

• False Asset Backing: Unicoin and its executives claimed the future tokens were “asset-backed” by billions of dollars in a portfolio of real estate and stakes in pre-IPO companies. The SEC asserts that the actual value of these assets was only a small fraction of the amount claimed.
• Inflated Sales Figures: The company boasted selling over $3 billion worth of certificates. However, the SEC found that actual proceeds from these sales never exceeded approximately $110 million.
• Misleading Registration Claims: Defendants allegedly described the certificates and tokens as “SEC-registered” or “U.S. registered,” despite the fact that no such registration had been filed with the commission.

Mark Cave, an associate director in the SEC’s Division of Enforcement, stated that Unicoin and its leaders exploited investors with promises of tokens backed by valuable real-world assets, which, as alleged, were worth significantly less than advertised, and a large portion of claimed sales were fictitious.

Individual Conduct and Regulatory Action

The complaint also highlights actions taken by CEO Alex Konanykhin, accusing him and the company of conducting unregistered offerings. Konanykhin is specifically alleged to have sold over 37.9 million of his personal rights certificates, often offering them at a discounted price.

The SEC charges Unicoin, Konanykhin, Moschini, and Dominguez with violating the antifraud provisions outlined in the Securities Act of 1933 and the Securities Exchange Act of 1934. The commission is seeking court orders for permanent injunctive relief against the defendants, the disgorgement of any ill-gotten gains plus interest, and civil penalties. Furthermore, the SEC has requested orders that would prohibit the three executives from serving as officers or directors of any public company in the future. Civil fines are also sought against Unicoin itself.

In a related development, the lawsuit also named General Counsel Richard Devlin, alleging he repeated similar false claims in private placement memoranda. Devlin has reportedly reached a settlement with the SEC, agreeing to a permanent injunction and a $37,500 civil penalty, without admitting or denying the allegations against him. This case underscores the SEC’s ongoing efforts to pursue enforcement actions against companies and individuals alleged to be involved in misleading investors within the digital asset space.