Crypto investment platform Unicoin responded to the US Securities and Exchange Commission’s fraud lawsuit after three months, claiming the agency distorted its regulatory statements to support its case.
Unicoin informed a New York federal judge on Wednesday that the SEC’s lawsuit should be dismissed as it “selectively quotes communications and misrepresents their meaning and context; treats routine financial expectations and confidence as fraud; and overlooks Unicoin’s clear warnings regarding risk.”
It added, “Most strangely, the SEC misinterprets Unicoin’s disclosures in the company’s own SEC filings and unfairly reframes these disclosures as evidence of deceit.”
In May, the SEC filed a lawsuit against Unicoin, CEO Alex Konanykhin, board member Silvina Moschini, and former investment chief Alex Dominguez, alleging they raised $100 million by misleading investors regarding certificates that provided rights to receive Unicoin tokens and stock.
Unicoin asserts SEC needs a higher standard of proof
Unicoin contended that the SEC had constructed its claims without sufficient foundation, arguing the allegation of violating securities laws requires more proof.
“Securities fraud necessitates more. It involves a false statement, made with intent, that reasonable investors would have relied upon,” it stated. “In cases like this, where the risks highlighted by the SEC were disclosed clearly and repeatedly, those elements cannot be satisfied.”
An excerpt from Unicoin’s opening argument in its motion to dismiss. Source: PACER
It stated the SEC’s lawsuit was a “shotgun pleading” that failed to present a motive for Unicoin’s alleged actions and depended on circumstantial evidence, “semantics, and mischaracterizations of statements taken entirely out of context.”
SEC accuses Unicoin of misleading statements about tokens and certificates
The SEC claimed that Unicoin misled investors by asserting that billions of dollars in real-world assets, like real estate and equity in pre-IPO companies, would back its upcoming token and rights certificates.
The regulator argued that the actual value of these assets was a fraction of what Unicoin represented and that the company misrepresented its financial status.
The agency alleged that Unicoin claimed to have sold over $3 billion in rights certificates when only $110 million had actually been sold, and it falsely advertised the tokens and certificates as SEC-registered.
Unicoin counters SEC allegations
In its filing, Unicoin asserted that the SEC’s claim of misleading investors regarding the backing of its token was based on statements “taken entirely out of context,” as company executives indicated that it was asset-backed, not the forthcoming tokens.
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Unicoin maintained that at no point did any Defendant claim that unicoins would serve as a fully collateralized investment.
It also noted that the tokens had not yet been created, accusing the SEC of attempting to hold it accountable for “forward-looking statements of optimism.”
Unicoin stated that the SEC’s lawsuit has hindered its ability to mint tokens and back them with assets, while simultaneously holding it liable “for not creating tokens that are fully collateralized by real-world assets.”
The company argued that the SEC had conflated the deal and property value of its ongoing real estate transactions, some of which were still being finalized.
Unicoin requested the court to dismiss the SEC’s lawsuit with prejudice, preventing the agency from re-filing the complaint.
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