Executives Allegedly Misled Thousands of Investors with Inflated Valuations and False Claims of Compliance
The U.S. Securities and Exchange Commission (SEC) has filed a sweeping fraud lawsuit against cryptocurrency startup Unicoin and its executives, accusing them of deceiving more than 5,000 investors to raise over $100 million through a yet-to-launch digital token.
Filed late Tuesday, the lawsuit marks one of the most prominent enforcement actions against a crypto firm since President Donald Trump returned to office, despite his administration’s pro-crypto stance.
According to the SEC, Unicoin marketed its upcoming token—also named Unicoin—as a safe, stable asset backed by tangible holdings, including real estate in Antigua and the Bahamas and stakes in pre-IPO companies. Instead of launching the token, the company allegedly sold certificates that promised future rights to it, misleading investors about both its legitimacy and the value of its underlying assets.
“The SEC’s allegations are blatantly false. I intend to prove in court that they constitute yet another case of gross abuse of power,” said Unicoin Chief Executive Alex Konanykhin in response to the suit.
Promotional efforts for the token were widespread, with advertising appearing in airports, on thousands of New York City taxis, and featuring endorsements from retired professional athletes. The company also allegedly claimed that its token was “SEC-compliant,” “SEC-registered,” and “U.S. registered”—assertions the regulator says were entirely false.
A key point of contention is the company’s public claim that investors could earn returns of over 9,000,000%, language that was quietly removed from Unicoin’s website after questions from The Wall Street Journal, according to the SEC’s complaint.
The SEC also pointed to inflated valuations of properties that Unicoin claimed to own. In one example, the company announced in 2023 that it had acquired land in Antigua worth $680 million, despite having no formal appraisal and internal doubts about the seller’s valuation. The SEC cited internal emails indicating the land might actually be worth less than $40 million.
Court documents referenced in the complaint further allege that Unicoin executives knew the seller’s representative had been disbarred in New York in 2002 for failing to respond to 10 complaints of misconduct, yet proceeded with the acquisition regardless.
Beyond Antigua, the SEC accuses Unicoin of overstating property values in Argentina, Thailand, and the Bahamas, casting further doubt on the startup’s asset-backed claims.
The case raises questions about the SEC’s enforcement direction under Trump. While the investigation into Unicoin began during the Biden administration, the Trump-era SEC has already dropped several cases—like the high-profile suit against Coinbase—that focused on regulatory compliance rather than fraud.
In a statement, Konanykhin said the action “undermines President Trump’s efforts to turn America into the Crypto Capital of the World.”
As the crypto industry awaits clarity on regulation, the Unicoin lawsuit is set to test the balance between fostering innovation and protecting investors in a volatile market.
