Crypto firm Unicoin will today file a motion to dismiss a lawsuit brought against it by the U.S. Securities and Exchange Commission (SEC), the company told Decrypt.
The SEC sued Unicoin and three of its top executives in May, accusing them of misleading investors and raising more than $100 million through false claims about its crypto offerings and company stock while attempting to cloak themselves in a veneer of regulation.
In its forthcoming filing, Unicoin will argue the case should be thrown out because the complaint distorts its record and ignores key disclosures. The company insists it has “embraced a strategy of transparency, compliance, and responsible innovation from the start,” highlighting that it voluntarily registered securities, published audited financial statements and limited participation to accredited investors.
Its CEO Alex Konanykhin has portrayed the SEC’s lawsuit as political theater, blaming “henchmen” from former SEC Chair Gary Gensler’s enforcement team.
“In the high point of his war on crypto, Gensler saw the Unicoin logo highly visible in Manhattan,” Konanykhin told Decrypt, referring to an ad campaign by Unicoin. “Our NYSE listing would mean a humiliating defeat of his anti-crypto crusade.”
He said that Gensler ordered his enforcers to preclude it from happening. In May of 2024, the SEC sent a “barrage” of subpoenas to our investors, brokers, lawyers, auditors, bankers and vendors, “deliberately disrupting important relationships,” he added.
“Just like during the both preceding investigations, the SEC investigators found no violation in our work,” the Unicoin CEO said, referring to two other clashes the company had with the SEC. “We were cutting no corners, complying with all rules and had top-level securities lawyers, compliance consultants and auditors. So, they crudely fabricated false charges.”
Among their allegations, regulators say Unicoin overstated the value of real estate acquisitions in Argentina, Antigua, Thailand and the Bahamas which were supposed to back their token, and in some cases announced deals that had not yet closed.
Unicoin’s motion to dismiss pushes back on this, saying the agency is conflating contractual commitments with completed transfers of title and insists that every deal was backed by binding agreements. “The SEC conflates deal value with property value,” the company said, adding that it measured purchases in the value of Unicoin tokens swapped for land.
In 2023, for example, the company said it had signed an agreement worth $335 million to purchase a Thai luxury resort. It added in a press release that it would pay 140% of the property’s appraised value in Unicoins.
Konanykhin told Decrypt that Unicoin was unable to take ownership of these properties as its intention was to transfer funds following its initial coin offering, which has been delayed due to the SEC action.
The agency also claims Unicoin misrepresented the company’s financial position while advertising and selling so-called “Unicoin Rights Certificates” and that Konanykhin himself improperly sold nearly 38 million of them to investors who were barred from participating.
The company said its marketing materials always paired optimism with explicit warnings about risk and argued the SEC was cherry-picking snippets to portray ordinary projections as fraudulent misstatements. “The SEC treats routine financial projection and optimism as fraud, while overlooking that Unicoin coupled every aspirational claim with sober warnings,” the motion states.
Konanykhin said he had not sold the certificates to unaccredited investors but that he had asked about the possibility around the same time, leading the SEC to assume he had done so. He has vowed to fight the lawsuit, and claims the SEC’s actions have cost its 8,000 investors billions in lost value and blocked the success of Unicoin.
“If we went public a year ago, I’m sure the stock market would give us a healthy premium,” he said, adding he estimated the company would now be worth $25 billion. “Instead, we are forced to literally fight for our survival.”
No guarantee for Unicoin
Legal experts suggest the company faces a tough road.
Katherine Reilly, a partner in Pryor Cashman’s White Collar and Regulatory Enforcement Group and a former federal prosecutor, told Decrypt that the SEC’s complaint reflects a more traditional securities fraud case than some of the other crypto cases it has dropped in the past few months.
“It talks a lot about really traditional misrepresentations that Unicoin executives are alleged to have made,” she said. “For example, the SEC lays out claims that executives overstated financing and runway, and represented that their coin was backed by real property and assets that didn’t go through.”
Although the Trump-era SEC has pulled back from a number of recent cases against major crypto players, Reilly said this one may be different. “I think this is a strong example of the type of enforcement action the SEC still plans to pursue. There’s clearly an effort by Unicoin to align itself with the new administration’s allyship with the crypto industry and its emphasis on American entrepreneurialism,” she said.
“But I don’t think that’s likely to mean much in front of a judge in the Southern District of New York.”
Decrypt reached out to but did not immediately receive a response from the SEC.
