Unicoin CEO Alex Konanykhin Calls SEC Fraud Accusations 'Complete and Utter Bulls--t'

The Securities and Exchange Commission (SEC) is preparing to formally accuse Unicoin of fraud, deceptive practices, and the offering and sale of unregistered securities, according to a letter from the agency’s Division of Enforcement viewed by Fortune. The letter, dated Dec. 14, threatens the company with administrative proceedings and a cease-and-desist order over the alleged violations.

The SEC did not specify the exact violations in the letter, which was addressed to Unicoin CEO Alex Konanykhin and obtained by Fortune through a public records request.

Konanykhin told Fortune that the SEC’s crypto enforcement division issued subpoenas against his company and others in May. Those subpoenas concerned Unicoin’s main product, a cryptocurrency backed by real-world assets, including what Konanykhin described as billions of dollars’ worth of real estate holdings.

The company’s plan to go public through a reverse merger with a shell company called NetCents Technology was announced in April. Unicoin had filed paperwork with the SEC announcing the deal, which would have seen Konanykhin become a major shareholder in the publicly traded company.

But Konanykhin said he decided to breach the agreement with the SEC after Trump won the recent election, and the company instead launched an ICO in November. He said that the SEC was “completely pissed off” by the move, and that he had been expecting the agency to take further action against the company.

“Complete and utter bulls--t,” Konanykhin said of the SEC’s fraud allegations.

He added that the company has been subject to several SEC investigations, though the latest is the first to result in a Wells Notice. The notice gives Unicoin 30 days to respond to the SEC’s allegations before the agency can file a formal administrative complaint.