The U.S. Securities and Exchange Commission (SEC) has initiated a lawsuit against crypto entity Unicoin and three of its executives, alleging fraud connected to the raising of over $100 million in tokens not genuinely backed by the real estate properties claimed by its executives.

According to the SEC’s claims, Unicoin misrepresented its token’s backing, asserting that it was supported by real estate yet failing to close any deals on such assets or inaccurately valuing them. This has raised serious concerns over the company’s adherence to securities laws.

Key points include:

• The SEC asserts that Unicoin did not own the properties it touted as assets and that those assets were significantly overvalued. For instance, the company announced acquisitions with appraised values exceeding $1.4 billion; however, the actual worth of these properties is estimated at only $300 million and the majority of deals never finalized.
• The accusations also include overstating revenues from rights certificates. While Unicoin claimed to have generated $3 billion in sales, actual figures were reportedly closer to $110 million.
• Promotional strategies utilized by Unicoin purportedly included exaggerated claims of potential returns, with advertisements circulating via numerous channels, including social media, public transportation ads, and digital platforms.

The SEC’s filing seeks monetary relief and civil penalties against the involved parties.

Unicoin’s Reaction: The company received a Wells notice from the SEC last December, indicating that regulatory action was forthcoming. Recently, CEO Konanykhin rejected the SEC’s proposed settlement terms, citing unacceptable demands.

For more insights, refer to the SEC’s press release.