Unicoin, Top Executives Charged in Offering Fraud That Raised More than $100 Million from Thousands of Investors

The Securities and Exchange Commission today 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. “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,” said Mark Cave, Associate Director in the SEC’s Division of Enforcement. “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.” The SEC alleges that Unicoin broadly marketed rights certificates to the public through extensive promotional efforts, including advertisements in major airports, on thousands of New York City taxis, and on television and social media. Among other things, Unicoin and its executives are alleged to have convinced more than 5,000 investors to purchase rights certificates through false and misleading statements that portrayed them as investments in safe, stable, and profitable “next generation” crypto assets, including claims that: Unicoin tokens underlying the rights certificates were “asset-backed” by billions of dollars of real estate and equity interests in pre-IPO companies, when Unicoin’s assets were never worth more than a small fraction of that amount; the company had sold more than $3 billion in rights certificates, when it raised no more than $110 million; and the rights certificates and Unicoin tokens were “SEC-registered” or “U.S. registered” when they were not. 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. The SEC’s investigation was conducted by Adam B. Gottlieb, Jason Schall, and Joss Berteaud and was supervised by W. Bradley Ney and Mr. Cave. The litigation will be led by Russell Feldman and Mr. Gottlieb and supervised by Jack Kaufman.

The Securities and Exchange Commission today 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. “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,” said Mark Cave, Associate Director in the SEC’s Division of Enforcement. “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.” The SEC alleges that Unicoin broadly marketed rights certificates to the public through extensive promotional efforts, including advertisements in major airports, on thousands of New York City taxis, and on television and social media. Among other things, Unicoin and its executives are alleged to have convinced more than 5,000 investors to purchase rights certificates through false and misleading statements that portrayed them as investments in safe, stable, and profitable “next generation” crypto assets, including claims that: Unicoin tokens underlying the rights certificates were “asset-backed” by billions of dollars of real estate and equity interests in pre-IPO companies, when Unicoin’s assets were never worth more than a small fraction of that amount; the company had sold more than $3 billion in rights certificates, when it raised no more than $110 million; and the rights certificates and Unicoin tokens were “SEC-registered” or “U.S. registered” when they were not. 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. The SEC’s investigation was conducted by Adam B. Gottlieb, Jason Schall, and Joss Berteaud and was supervised by W. Bradley Ney and Mr. Cave. The litigation will be led by Russell Feldman and Mr. Gottlieb and supervised by Jack Kaufman.