Why Are We Still Under the SEC’s Gun?

WASHINGTON, D.C. — Unicoin CEO Alex Konanykhin said he’s asked the U.S. Securities and Exchange Commission to pull its investigation against the crypto operation and hasn’t yet received a response.

Unicoin represented a final shot against the industry from previous Chair Gary Gensler’s SEC, which informed the firm in an official notice late last year that the regulator intended to accuse it of fraud, deceptive practices and handling unregistered securities. The investigation was announced in the final days of President Joe Biden’s administration in December, before the SEC’s leadership was taken over by those selected by crypto fan President Donald Trump.

The CEO, who has watched a dozen other crypto companies let off the hook of their enforcement actions by the agency’s new management, told CoinDesk he wrote a March 17 letter to the agency’s new Crypto Task Force, asking about the investigation.

“I seek your guidance on the best way to address this abuse of power and bring it to an end,” Konanykhin wrote in the letter, a copy of which has been reviewed by CoinDesk. He requested the matter be terminated and that the conduct of the enforcement official involved with the case at the agency be reviewed, because of his “willingness to weaponize the SEC’s authority for political purposes.”

A spokesperson for the SEC declined to comment on Unicoin’s status on Wednesday. A Unicoin spokesperson told CoinDesk on Tuesday that the company “remains in the final stages of the SEC review process. As of now, we have not received any new updates or formal feedback from the SEC regarding our registration. We are fully committed to compliance and transparency, and we continue to work toward securing the necessary approvals for our planned offerings.”

The CEO believes his company, which suggests investors can see up to 8,000% returns, was targeted by agency harassment last year, he said in an interview with CoinDesk in Washington.

“They demanded from us to promise not to go public in the United States, not to ICO, not to raise funds,” he said. “So I packed my bags and moved to Europe to resume business.”

He said the election of Trump and the president’s promises to make the U.S. the global crypto capital made him come back to New York from Switzerland, with an intent to go public here.

“We thought the war was over, and we said to the SEC, ‘Hey, we’re resuming our activity,” Konanykhin said. At that point, the agency announced it intended to target the company with civil charges.

Konanykhin noted that the regulator had accused them of violating securities laws with an airdrop. Konanykhin argued that it’s a common marketing strategy seen in many crypto assets, and is “what the president of the United States is doing with his memecoin.”

“It’s embarrassing that the war on crypto still continues,” he said. If the agency continues its war on crypto by pursuing Unicoin, “I think so many observers are going to be astonished.”

Unicoin started as an effort to create a “more transparent and reliable alternative” to Bitcoin in the U.S. (which, the Unicoin website said, has returned 9 million percent to investors over the last 10 years). He said some analysts believe bitcoin was “created by Chinese intelligence, but nobody really knows by whom.”

“I’m elated by the opportunity to participate in making American the crypto capital of the planet as the president pledged he wants to do, even though it’s highly annoying to still have the legacy persecution from the SEC,” Konanykhin said.

Meanwhile, he said, “we are preparing actively for going public.”