Unicoin’s CEO Announces Plans to Request Dismissal of SEC Fraud Case

Today, crypto firm Unicoin plans to file a motion to dismiss the lawsuit filed against it by the U.S. Securities and Exchange Commission (SEC), as reported by Decrypt.

The SEC accused Unicoin and three leading executives in May of misleading investors and raising over $100 million through false claims regarding its crypto offerings and company stock while pretending to follow regulations.

In its upcoming filing, Unicoin will argue that the complaint misrepresents its track record and overlooks crucial disclosures. The firm asserts it has prioritized “transparency, compliance, and responsible innovation” from the beginning, emphasizing that it voluntarily registered securities, published audited financial statements, and limited participant access to accredited investors.

CEO Alex Konanykhin has described the SEC’s lawsuit as political theatrics, attributing the allegations to “henchmen” from former SEC Chair Gary Gensler’s enforcement team.

“During Gensler’s aggressive stance against crypto, he noticed our Unicoin branding prominently displayed in Manhattan,” Konanykhin remarked to Decrypt, referencing Unicoin’s ad campaign. “If we list on the NYSE, it would signify a substantial failure for his anti-crypto agenda.”

He claimed that Gensler instructed his team to prevent this from occurring. In May 2024, the SEC issued a “barrage” of subpoenas to investors, brokers, lawyers, auditors, bankers, and vendors, “intentionally disrupting vital relationships,” he noted.

“As seen in previous investigations, SEC investigators concluded there were no violations on our part,” the Unicoin CEO stated, referring to two prior confrontations with the SEC. “We adhered to all regulations, employing leading securities lawyers, compliance consultants, and auditors. Hence, these baseless charges were fabricated.”

Among the accusations, regulators allege that Unicoin exaggerated the value of its real estate acquisitions in Argentina, Antigua, Thailand, and the Bahamas, which were meant to support their token, and at times announced transactions that hadn’t been finalized.

Unicoin’s motion to dismiss counters this by asserting that the agency is misapplying the difference between contractual obligations and finalized ownership. The firm insists every partnership was based on binding agreements. “The SEC confuses deal value with actual property value,” the company stated, adding that it evaluated purchases in terms of Unicoin tokens exchanged for land.

In one instance in 2023, the company claimed it had signed a deal worth $335 million to acquire a luxury resort in Thailand. It further stated in a press release that it would compensate 140% of the property’s appraised worth in Unicoins.

Konanykhin explained to Decrypt that Unicoin could not take control of these assets as its goal was to transfer funds following its initial coin offering, which has been postponed due to SEC actions.

The SEC also contends that Unicoin misrepresented its financial status while marketing and selling “Unicoin Rights Certificates,” with Konanykhin allegedly selling nearly 38 million of them to ineligible investors.

The company asserts that its promotional content balanced optimism with clear risk warnings and argued that the SEC selectively highlighted snippets to misrepresent standard forecasts as fraudulent claims. “The SEC interprets typical financial projections and enthusiasm as fraud, while disregarding that Unicoin consistently included prudent warnings with every optimistic assertion,” the motion declares.

Konanykhin remarked that he did not sell the certificates to unaccredited investors but had inquired about the possibility around that time, leading the SEC to infer misconduct. He is determined to contest the lawsuit, claiming the SEC’s actions have inflicted billions in losses on its 8,000 investors and hindered Unicoin’s potential.

“If we had gone public a year ago, I believe the market would have assigned us a nice premium,” he noted, estimating the company’s current value at $25 billion. “For now, we are literally fighting for our existence.”

Unicoin’s Uncertain Future

Legal experts indicate that the company faces a challenging path ahead.

Katherine Reilly, a partner at Pryor Cashman’s White Collar and Regulatory Enforcement Group and a former federal prosecutor, told Decrypt that the SEC’s charges resemble a more conventional securities fraud case than some recent crypto cases they have abandoned.

“The complaint highlights traditional misrepresentations that Unicoin executives are alleged to have made,” she stated. “For instance, the SEC outlines claims that executives exaggerated their financing and runway, and that they implied their coin was supported by real assets that were not finalized.”

While the SEC has stepped back from various cases against major crypto entities during the Trump administration, Reilly noted that this case might stand apart. “This is a strong example of the type of enforcement action the SEC still intends to pursue. Unicoin appears to be attempting to align itself with the current administration’s support for the crypto industry and its focus on American entrepreneurship,” she explained.

“However, I doubt this will hold significant weight in front of a judge in the Southern District of New York.”

Decrypt reached out to the SEC but did not receive an immediate response.