The U.S. Securities and Exchange Commission (SEC) has filed a lawsuit against Unicoin and three of its top executives, claiming that the company illegally raised over $100 million by deceiving investors.
Allegations of Fraud
The SEC alleges that Unicoin represented to investors that its tokens would be backed by billions of dollars in real estate assets, while in fact those assets were supposedly valued at well under the purported amount. In addition, the company allegedly falsely advertised that its services were SEC-registered when they were not.
Aggressive Marketing Tactics
Unicoin allegedly employed an aggressive marketing strategy, with ads in airports, New York City cabs, on TV, and on social media. These campaigns induced 5,000 investors to buy rights certificates which were advertised as 'safe and profitable' next-generation crypto assets. However, the SEC argues that most of these sales were a mirage.
Legal Actions and Penalties
Aside from the fraud charges, the SEC also claims that Unicoin and CEO Alex Konanykhin violated federal securities registration requirements by selling nearly 38 million of his own certificates at discounted prices to investors. The complaint was filed in federal court in Manhattan, alleging violations of the antifraud provisions of federal securities laws.
The SEC's allegations against Unicoin highlight the need for transparency and compliance in the cryptocurrency market. Investors should be vigilant and not easily swayed by promises of high returns without proper backing and regulatory approval.
