Unicoin, Inc. and three of its top executives fraudulently made misleading statements in an offering statement, the Securities and Exchange Commission charged Monday.
In a statement, the SEC said the company and its CEO and Board Chairman Alex Konanykhin, its former president and board chairwoman Silvina Moschini, and its current board member and form Chief Investment Officer Alex Dominguez, offered certificates for crypto assets and Unicoin common stock that were not what they appeared to be.
“We allege that Unicoin and its executives exploited thousands of investors with fictitious promises that its tokens, when issued, would be backed by real-world assets including an international portfolio of valuable real estate holdings,” Mark Cave, associate director in the SEC’s Division of Enforcement, said. “But as we allege, 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. Unicoin’s most senior executives are alleged to have perpetuated the fraud, and today’s action seeks accountability for their conduct.”
Specifically, the SEC said Unicoin marketed rights certificates to more than 5,000 investors that portrayed investments into its products as “safe, stable, and profitable ‘next generation’ crypto assets.” The company claimed its assets were backed by billions of real estate and equity interests in pre-IPO companies when they were worth a fraction of that amount. Additionally, the company said it had sold more than $3 billion in rights certificates when it had raised no more than $110 million, and that the rights certificates and Unicoin tokens were “SEC-registered” or “U.S. registered” when they were not.
Additionally, the SEC said the company and Konanykhin violated federal securities law by selling unregistered offers. Konanykhin sold more than 37.9 million rights certificates to offer better pricing and target investors the company had prohibited from participating in the offering to avoid jeopardizing its exemption to registration requirements, the agency said.
The complaint charges the company and its three executives with violations of the antifraud provisions of federal securities law, and charges that Unicoin and Konanykhin violated the Securities Act of 1933. The SEC is seeking permanent injunctive relief, disgorgement of ill-gotten gains with prejudgment interest and civil penalties.
The SEC also charged Unicoin’s general counsel, Richard Devlin, with violating the federal securities law’s antifraud provisions by negligently making similar misstatements in private placement memoranda Unicoin used to sell rights certificates. Devlin has consented to the entry of a final judgment for permanent injunctive relief and to pay a $37,500 penalty.