The U.S. Securities and Exchange Commission (SEC) has issued a Wells Notice to Unicoin, signaling its intention to file a lawsuit against the crypto investment firm. This action reflects the agency’s ongoing enforcement stance against cryptocurrency companies under outgoing Chair Gary Gensler, whose tenure ends in January. Unicoin, a crypto investment company founded in 2015, has connections to the investment-themed television series Unicorn Hunters, featuring high-profile figures like Steve Wozniak and Lance Bass. The Wells Notice alleges fraud, deceptive practices, and the sale of unregistered securities, marking a departure from previous lawsuits against crypto companies.
Unicoin CEO Alex Konanykhin revealed that the SEC’s crypto enforcement division issued warrants to his company and others in May, focusing on the flagship product, a cryptocurrency backed by real-world assets including significant real estate holdings. Following a standstill agreement, which restricted Unicoin from conducting an ICO or public offering, the company allegedly breached the agreement after Donald Trump’s election victory. The Wells Notice includes fraud-related violations, raising questions about whether the SEC will file formal charges before new leadership assumes office.
In response to the Wells Notice, Konanykhin stated that Unicoin’s legal team is preparing to reply by December 24. Unicoin, unlike other crypto projects, identifies its token as a security, publicly filing with the SEC for five years. The company has faced multiple SEC investigations despite adhering to public reporting practices. Unicorn Hunters introduced Unicoin in 2022, showcasing a cryptocurrency collateralized by real-world assets.
Gary Gensler, as the outgoing SEC Chair, has been criticized for his rigorous enforcement measures against major cryptocurrency companies. His focus on enforcing existing securities laws triggered industry responses, including lawsuits and investigations targeting leading firms and public figures in the crypto space. Despite Gensler’s imminent departure, the SEC remains active in issuing Wells Notices and lawsuits against crypto companies like Unicoin and CyberKongz.
The SEC recently issued a Wells Notice to CyberKongz, a web3 gaming company, over alleged violations involving unregistered securities and fraud. CyberKongz plans to challenge the SEC’s claims, emphasizing their long-term commitment to innovation within the web3 space. The team noted potential implications for the broader blockchain industry, as the SEC’s stance could impact NFT and gaming platforms. CyberKongz received support from industry leaders and expressed optimism for clearer regulatory pathways ahead.
Amid political shifts and changing dynamics within the crypto industry, the SEC’s enforcement actions against Unicoin and CyberKongz signal ongoing regulatory challenges for crypto firms. Gensler’s tenure as SEC Chair, marked by rigorous enforcement measures and lawsuits against major cryptocurrency companies, has influenced the regulatory landscape. As new leadership assumes office, the outcomes of ongoing investigations and enforcement actions will shape the future regulatory environment for blockchain and crypto projects.
