The Securities and Exchange Commission (SEC) charged New York City-based Unicoin, Inc. and three of its top executives—CEO and Board Chairman Alex Konanykhin; Silvina Moschini, former president, former board chairwoman, and current board member; and former Chief Investment Officer Alex Dominguez—for “false and misleading statements in an offering of certificates that purportedly conveyed rights to receive crypto assets called Unicoin tokens and an offering of Unicoin, Inc.’s common stock.”
On December 10, 2024, Unicoin received a Wells Notice from the SEC stating that it has made a preliminary determination to recommend that the SEC file an enforcement action against the firm.
According to the SEC’s complaint, Unicoin raised over $100 million from global and US investors. Approximately 5000 investors purchased “certificates” that gave the right to receive “Unicoins” – if they were ever issued.
The allegations include that the company claimed the Unicoin Rights Certificates were “asset-backed by billions of dollars in real estate and equity interests in promising pre-IPO companies.”
The complaint states that false or misleading statements were used to sell the certificates, promoted on social media, and touted as safe and stable, yet during the relevant period, assets were insufficient to maintain operations for up to a year.
Mark Cave, Associate Director in the SEC’s Division of Enforcement.
“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. 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.”
According to the SEC’s complaint, Unicoin and Konanykhin also “violated the federal securities laws by engaging in unregistered offers and sales of rights certificates.”
Konanykhin offered and sold “over 37.9 million of his 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, as alleged.”
The SEC’s complaint, filed in the U.S. District Court for the Southern District of New York, “charges Unicoin, Konanykhin, Moschini, and Dominguez with violations of the antifraud provisions of the federal securities laws, Konanykhin and Unicoin with violating the registration provisions of the Securities Act of 1933, and Konanykhin as a control person for certain of Unicoin’s antifraud violations.”
The complaint seeks “permanent injunctive relief, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties against Unicoin, Konanykhin, Moschini, and Dominguez, as well as officer-and-director bars against Konanykhin, Moschini, and Dominguez.”
The complaint also charges Unicoin’s general counsel, Richard Devlin, with violating the “antifraud provisions of the federal securities laws by negligently making similar misstatements in private placement memoranda Unicoin used to offer and sell rights certificates and Unicoin common stock.”
Without admitting or denying the SEC’s allegations, Devlin has “consented to the entry of a final judgment providing permanent injunctive relief and ordering him to pay a $37,500 civil penalty.”