Cryptocurrency company Unicoin has landed itself in trouble with the U.S. Securities and Exchange Commission (SEC). The SEC on Wednesday charged Unicoin and three of its top executives, including its CEO and Board Chairman Alex Konanykhin, for false and misleading statements that raised more than $100 million from thousands of investors.
“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.
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Unicoin, launched in February 2022, is a cryptocurrency developed by the creators of the investment show “Unicorn Hunters.” The company positions itself as an asset-backed, stable alternative to traditional cryptocurrencies, claiming to be supported by real estate and equity in emerging companies. Unicoin has raised over $500 million through sales to investors in more than 100 countries. It has also made headlines with significant acquisitions, including the Eden Grand Resort in Thailand. Despite these efforts, Unicoin faces regulatory challenges, especially with the U.S. SEC lawsuit for fraud.
Cave added, “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 charges and lawsuit against Unicoin could have significant implications for the company. If the SEC’s claims are upheld, Unicoin could face financial penalties, a loss of investor trust, and potential restrictions on its ability to operate. The lawsuit also highlights the risks associated with unregulated cryptocurrencies. While Unicoin continues to promote itself as a stable, asset-backed option, the ongoing legal issues could undermine its credibility and hinder its growth, affecting both investors and the broader crypto market.