The US Securities and Exchange Commission (SEC) has brought charges against New York-based cryptocurrency exchange Unicoin and its top executives for allegedly defrauding investors through misleading claims about the sale of rights certificates and company stock. The SEC claims that Unicoin falsely advertised raising over $3 billion through its rights certificate offerings, when in reality they only raised $110 million. The agency accuses CEO and Chairman Alex Konanykhin, former president and board chairwoman Silvina Moschini, former Chief Investment Officer Alex Dominguez, and general counsel Richard Devlin of orchestrating a deceptive promotional campaign that resulted in over 5,000 individuals purchasing rights certificates marketed as access to “asset-backed” Unicoin tokens. These promotional materials, which were widely circulated through high-profile advertising, portrayed the rights certificates as secure and profitable investments linked to crypto assets backed by billions of dollars in real estate and equity holdings. However, the SEC argues that Unicoin’s actual holdings were significantly less than what was claimed. The agency also alleges that Unicoin and its executives falsely claimed that the offerings were registered with the SEC or were compliant with US regulations, when they were not. The SEC further claims that Konanykhin personally sold nearly 38 million rights certificates, including to investors that Unicoin had initially excluded to maintain a registration exemption, which is a violation of securities laws. All four individuals are charged with antifraud violations, with Unicoin and Konanykhin also facing charges related to unregistered securities sales. The SEC is seeking permanent injunctions, civil penalties, and disgorgement of ill-gotten gains, as well as prohibiting the three executives from serving as officers or directors of public companies. Devlin, the company’s general counsel, has agreed to settle the charges without admitting or denying the allegations. His settlement includes a permanent injunction and a $37,500 civil penalty for negligently making misleading statements in private placement documents. In an opinion piece published in the Miami Herald, Konanykhin stated that the SEC informed Unicoin in December of planned fraud charges and that the company has been cooperating with the investigation.
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