Crypto Firm Unicoin Sued for Fraud by SEC After Raising $100 Million

The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against crypto investment firm Unicoin and four of its top figures, accusing them of deceiving thousands of investors through inflated claims and misleading financial information. The case centers around more than $100 million raised via rights certificates tied to Unicoin tokens and stock.

Good to know

• The SEC says Unicoin overstated sales by nearly $3 billion.
• The firm allegedly claimed real estate backing that did not exist.
• Unicoin falsely marketed its products as SEC-registered.

The lawsuit, filed in Manhattan federal court, names Unicoin CEO Alex Konanykhin, board member Silvina Moschini, and former investment head Alex Dominguez. The SEC alleges the trio misled more than 5,000 investors, selling them certificates tied to Unicoin tokens with promises they would be backed by global real estate assets.

Mark Cave, associate director of the SEC’s Division of Enforcement, said, “The real estate assets were worth a mere fraction of what the company claimed, and the majority of the company’s sales of rights certificates were illusory.”

According to the SEC’s complaint, the misleading statements began in 2022. Unicoin and its executives promoted the company as having vast real estate holdings and a strong financial position. However, the SEC claims the firm’s real estate portfolio was minimal and that Unicoin had less than a year of financial runway—sometimes just four months—despite telling investors it had decades of funding.

The agency also accused Unicoin of grossly inflating its sales figures. While Unicoin publicly claimed it had sold more than $3 billion in rights certificates, the SEC says the real total was only $110 million.

Unicoin allegedly labeled its tokens and certificates as SEC-registered, which they were not. That misrepresentation, combined with exaggerated financial strength, formed the core of the SEC’s charges.

The Commission also charged Unicoin’s general counsel, Richard Devlin, for his role. Devlin resolved the matter by agreeing to a $37,500 civil penalty without admitting or denying wrongdoing.

The SEC is seeking permanent injunctive relief, the return of funds, and civil penalties. The outcome of the case could impact how future crypto-based offerings are marketed to U.S. investors.