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COMMITMENTS AND CONTINGENCIES
 12 Months Ended
Dec. 31, 2025
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

NOTE 12 – COMMITMENTS AND CONTINGENCIES

 

Legal proceedings

 

We may from time to time be involved in various claims and legal proceedings of a nature we believe are normal and are incidental to our business. These matters may include product liability, intellectual property, employment, personal injury caused by our employees, and other general claims. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

 

Finch, et al. v. Unicoin Inc. On September 24, 2025, a putative class action complaint (the “Finch complaint”) was filed in the United States District Court for the Southern District of New York against Unicoin and certain current and former officers, captioned Finch, et al. v. Unicoin Inc., et al., Case No. 1:25-cv-07939.

 

The Finch complaint alleges, among other things, violations of New York General Business Law §§ 349 and 350, as well as related claims, in connection with the Company’s marketing of Unicoin Rights Certificates. To the Company’s knowledge, neither the Company nor any of the individual defendants have yet been served with the complaint.

 

The Company believes the Finch complaint claims are without merit and intends to defend the matter vigorously. The Company is unable to predict the outcome of this matter or reasonably estimate a range of possible loss, if any, at this time.

 

German Arochi, individually and on behalf of all others similarly situated v. Unicoin Inc. On November 6, 2025, a putative class action complaint (the “Arochi complaint”) was filed in the United States District Court for the Southern District of New York against Unicoin and certain current and former officers, captioned German Arochi, individually and on behalf of all others similarly situated v. Unicoin Inc., et al., Case No. 1:25-cv-09273.

 

The Arochi complaint alleges, among other things, violations of New York General Business Law §§ 349 and 350, as well as related claims or causes of action, in connection with the Company’s marketing of Unicoin Rights Certificates. To the Company’s knowledge, neither the Company nor any of the individual defendants have yet been served with the complaint.

 

The Company believes the Arochi complaint claims are without merit and intends to defend the matter vigorously. The Company is unable to predict the outcome of this matter or reasonably estimate a range of possible loss, if any, at this time.

 

On December 10, 2024, we received a “Wells Notice” from the Staff of the SEC stating that it has made a preliminary determination to recommend that the SEC file an enforcement action against us. This proposed action would allege violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder and Sections 5 and 17(a) of the Securities Act of 1933. The Staff further advised us that the potential enforcement action may involve a civil injunctive action or other action allowed by law, and may seek remedies that include an injunction, disgorgement, pre-judgment interest, civil money penalties, and such other relief as may be available.

 

In addition, on December 10, 2024, Alex Konanykhin, our Chief Executive Officer and Chairman of our board of directors, Silvina Moschini, one of our directors and the Chief Executive Officer of our subsidiary Unicorns, Inc., Alejandro Dominguez, our Chief Investment Officer, and Richard Devlin, our former Senior Vice President and General Counsel, each received a “Wells Notice” from the Staff stating that it has made a preliminary determination to recommend that the SEC file an enforcement action against Messrs. Konanykhin, Dominguez and Devlin and Ms. Moschini. This proposed action would allege violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder and Sections 5 and 17(a) of the Securities Act, as well as, in the case of Mr. Konanykhin and Ms. Moschini, violations of these provisions as a controlling person of us under Section 20(a) of the Exchange Act. The Staff further advised these individuals that the potential enforcement action may involve a civil injunctive action or other action allowed by law, and may seek remedies that include an injunction, disgorgement, pre-judgment interest, civil money penalties, a bar from service as an officer or director and limitations on activities or bars from association and such other relief as may be available.

 

The Wells Notices are neither formal allegations nor findings of wrongdoing. They allow the recipients the opportunity to address the issues raised by Staff before they make an enforcement recommendation to the SEC or the SEC votes on whether to authorize an enforcement action. See our Current Report on Form 8-K filed on December 16, 2024 regarding our response to the Wells Notices which can be found at https://www.sec.gov/ix?doc=/Archives/edgar/data/1740742/000182912625000028/unicoin_8k.htm.

 

SEC v. Unicoin Inc., et. al. On May 20, 2025, the U.S. Securities and Exchange Commission (the “SEC”) filed a civil enforcement action against Unicoin Inc. and certain individuals, including its directors Silvina Moschini and Alex Konanykhin, Alejandro Dominguez, and its former General Counsel Richard Devlin in the United States District Court for the Southern District of New York. The action is captioned Securities and Exchange Commission v. Unicoin Inc. f/k/a TransparentBusiness, Inc., et al., Case No. 1:25-cv-4245 (S.D.N.Y.). The complaint alleges violations of various provisions of the federal securities laws in connection with Unicoin’s offer and sale of digital assets, including unicoin tokens, as well as alleged material misstatements and omissions in communications with investors. The SEC is seeking injunctive relief, disgorgement of proceeds, civil monetary penalties, officer and director bars, and other equitable relief. We believe the claims are without merit and intend to vigorously defend against the allegations. The litigation may result in financial liability, restrictions on future capital-raising efforts, or reputational harm, and could materially affect Unicoin’s business, operations, and prospects.

 

Additional Pending Litigation

 

In addition to the SEC litigation described above, the following legal matters are currently pending:

 

Jovan Tadic v. Unicoin, Inc. and Alex Konanykhin, Superior Court of California, County of Contra Costa, Case No. C24-02710: Tadic, by assignment from a third party, alleges Unicoin failed to deliver over one million tokens and certain equity interests. The complaint includes claims for breach of contract and alter ego liability and seeks declaratory and monetary relief. The defendants dispute the claims. The matter remains pending. The outcome of this case could result in monetary liability or reputational impact for Unicoin.

 

Pickholz v. TransparentBusiness, Inc. et al., United States District Court for the District of New Jersey, Civil Action No. 22-2504 (ES)(JBC): Michael Pickholz, a former Chief Financial Officer of TransparentBusiness, Inc., asserted claims against TransparentBusiness, Inc. and certain individuals alleging retaliation, equity-related matters, and wage violations, including claims under the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act. On September 26, 2025, the Court dismissed certain claims with prejudice, including claims related to Dodd-Frank retaliation and salary-based allegations, while allowing certain other claims to proceed.

 

On March 28, 2026, the parties entered into a settlement agreement resolving all claims asserted in the action without any admission of liability or wrongdoing by the defendants. Pursuant to the settlement, the Company agreed to (i) issue or transfer 500,000 shares of common stock, which had a total estimated fair value of approximately $25 thousand as of the settlement date; (ii) issue or transfer 500,000 unicoins, which had a total estimated fair value of approximately $5 thousand as of the settlement date; and (iii) pay $15 thousand to Mr. Pickholz’s legal counsel for attorneys’ fees and expenses. Upon completion of the settlement obligations, the litigation will be dismissed with prejudice.

 

We are not presently a party to any other legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

 

Litigations that have been settled by the Company

 

The following legal matters were settled by the Company during the year ended December 31, 2025:

 

BeeFree, LLC v. Unicoin, Inc. and Silvina Moschini, United States District Court for the Southern District of Florida, Case No. 0:24-cv-22408-ALTMAN/LETT: In September 21, 2024, BeeFree, LLC filed a lawsuit against Unicoin, Inc. and Silvina Moschini. The parties have now entered into a Settlement and Release Agreement dated June 20, 2025, resolving all claims. Under the agreement, Unicoin agreed to pay $200,000 in eight installments through March 2027 and to transfer 350,000 Unicoin tokens to BeeFree within ten days of executing a related purchase agreement. The Company intends to comply fully with the agreement and the matter will be dismissed with prejudice. The settlement resolves all claims related to the case.

 

Christopher DiFonzo v. Unicoin, Inc. and Alex Konanykhin, United States District Court for the Southern District of New York, Case No. 25-cv-2600: Plaintiff alleges that Unicoin and its CEO failed to compensate him for services rendered in connection with cryptocurrency compliance and business development. Claims include breach of contract and failure to reimburse expenses. On October 28, 2025, the Company settled the matter by agreeing to make a cash payment of $39 thousand within 60 days and by issuing 200,000 Unicoin rights to the plaintiff. If Unicoin conducts an ICO issuing more than 25 billion unicoins, it will deliver additional tokens to the plaintiff to maintain the intended proportional ratio of 200 thousand-to-25 billion. This settlement fully resolves all claims in the case. This settlement fully resolves all claims in the case.

 

Indemnification Obligations

 

The Company has agreed to indemnify its directors and executive officers for costs associated with any fees, expenses, judgments, fines and settlement amounts incurred by any of these persons in any action or proceeding to which any of those persons is, or is threatened to be, made a party by reason of the person’s service as a director or officer, including any action by the Company, arising out of that person’s services as the Company’s director or officer or that person’s services provided to any other company or enterprise at the Company’s request. The Company may also be subject to indemnification obligations by law with respect to the actions of its employees under certain circumstances and in certain jurisdictions.

 

Asset Swap Agreements

 

As of December 31, 2025, and through the filing date of these consolidated financial statements, the Company has signed certain asset swap agreements where consideration consisted of unicoins. Because the unicoin has not been delivered and listed for trading yet, management cannot yet ascertain control over the assets included in such asset swap agreements. Accordingly, management has not recorded these transactions in the consolidated balance sheet. In certain cases, the agreements include project failure or escrow provisions tied to a token launch timeline. Where such conditions have lapsed without fulfillment, the agreements are considered terminated or abandoned in accordance with their terms. Management is currently evaluating next steps, including the legal and accounting implications of such terminations, as well as whether to engage counterparties to renegotiate or revive any of the affected transactions under revised terms. The following represents summaries of each transaction:

 

  ● “Restrepo”: On July 29, 2024, the Company entered into an asset swap agreement (as amended) with Grupo Spira S.A.S., a company organized under the laws of Colombia, pursuant to which the seller agreed to transfer 100% ownership of certain real estate assets to the Company in exchange for rights to receive 4,340,000 unicoin tokens. Pursuant to the terms of the asset swap agreement, the seller is required to transfer the asset by deed. While due diligence has been completed, the transfer of title has not yet occurred. Accordingly, management has determined that the criteria for recognition of this transaction on the consolidated balance sheet has not been met.
     
  ● “Buona Vista”: On September 26, 2024, the Company entered into an Asset Swap Agreement (the “Agreement”) pursuant to its 140 Program with Victor Raul Montenegro Criado, an individual citizen of Peru, and Villa Paradiso S.A.C., a company organized under the laws of Peru (collectively referred to in this paragraph only as the “Seller”). Under the Agreement, the Seller agreed to transfer 100% of the ownership interest in Buona Vista – Casas Club & Resort S.A.C., a Peruvian entity holding certain real estate assets, to the Company in exchange for rights to receive 61,795,216 unicoin tokens. The unicoin token rights will be issued in three tranches, contingent upon the achievement of specified construction milestones related to the real estate assets. The initial ICO date was set for September 30, 2024, and was subsequently extended to March 30, 2025, pursuant to an amendment dated October 23, 2024. The Company did not proceed with the ICO by the extended deadline of March 30, 2025. Accordingly, on April 23, 2025, the parties executed a second amendment to revive and amend the original Agreement, extending the ICO deadline to December 31, 2025. The Company has instructed local counsel to initiate steps to move the transaction to escrow. As of the date of this report, the transaction has not yet moved to escrow; title to the assets has not transferred, and no unicoin rights have been issued in connection with the transaction. Accordingly, management has determined that the criteria for recognition of this transaction on the consolidated balance sheet has not been met.

 

  ● “Bahamas”: On January 24, 2024, the Company entered into two Asset Swap Agreements pursuant to its 140 Program to acquire the beneficial interest in two Bahamian entities, Long Island Investments Ltd. and Newport Harbour Ltd. (collectively referred to in this paragraph only as the “Landholding Companies”), which collectively own specified real estate parcels in the Bahamas. In exchange, the Company agreed to issue a total of 1,108,863,283 unicoin rights. On March 25, 2024, the parties executed an amendment clarifying certain rights and obligations, including provisions related to the conversion of the beneficial interest into full legal ownership. Under the Agreements, as amended, the Company obtained a beneficial interest in the Landholding Companies through a trust declaration, with the option to convert its beneficial interest into full legal ownership of the entities. The Agreements also included a rescission clause stipulating that if the unicoin tokens are not created and listed on crypto exchanges within nine months, the Agreements would terminate, and the assets and unicoin rights would revert to the Investors and Company, respectively. The Company did not proceed with the ICO as anticipated under the original Agreements. Accordingly, on September 27, 2024, the parties executed a second amendment extending the ICO deadline to December 31, 2024, and establishing the following interim obligations: (i) Finalize the technical procedures for transferring unicoins to New World Properties SPV Inc.’s crypto wallet; (ii) Facilitate the Company’s ongoing due diligence on the Investor Company and the Properties; and (iii) Complete the conversion of beneficial ownership of shares into full legal ownership of the Landholding Companies, thereby granting the Company full control over the Properties. The second amendment further provides that if, by January 30, 2025, the parties are unable to agree on a new ICO date and no regulatory delay is in effect, the Agreement shall be deemed null and void ab initio, releasing all parties from any liabilities or obligations. The Company did not proceed with the ICO by the extended deadline of December 31, 2024. On May 21, 2025, counsel for New World Properties SPV Inc. notified the Company of its withdrawal from representation, citing the pending SEC lawsuit against the Company as one of the reasons for his withdrawal. In the notice, counsel stated its belief that the transaction between Unicoin and the SPV could not proceed to closing under the current circumstances. This withdrawal abruptly halted the progress that had been made between the parties’ legal counsel toward finalizing an extension of the transaction deadline and completing the conversion of the Company’s beneficial interest into full legal ownership of the Landholding Companies. As a result, the Company must now reengage directly with the relevant investors to assess the status of the transaction and determine whether a path forward remains feasible. However, there is no assurance that the transaction will be consummated.
     
    Due to the existence of the rescission provision in the agreements, and because the Company has not completed the process of converting beneficial ownership into full legal ownership, management has concluded that the criteria for recognition of this transaction in the consolidated balance sheet have not been met.
     
  ● “Greenmall Venezuela”: On November 1, 2023, the Company entered into an asset swap agreement with Shine Investment Corp. a company organized under the laws of Panama (referred to in this paragraph only as the “Seller”), pursuant to which the seller agreed to transfer 100% of the ownership interest in Inversiones Inmobiliarias Petroin CA, a Venezuelan entity owning certain real estate assets, to the Company, in exchange for rights to receive 11,496,800 unicoin rights. Under the terms of the asset swap agreement, all corporate documents related to the transaction were deposited in escrow pending the transfer of the consideration to the designated wallet. As of the date of this report, although the agreement remains in effect, the escrow period has lapsed, the escrow agent has returned the corporate documents to the Seller, and the transaction has not been consummated. Accordingly, management has determined that the criteria for recognition of this transaction in the consolidated balance sheet has not been met.
     
  ● “Colorado”: On October 23, 2023, the Company entered into an Asset Swap Agreement (as amended) with Bart M. Gould and Rozalyn S. Gould, husband and wife residing in the United States (collectively referred to in this paragraph only as the “Sellers”), pursuant to which the Company agreed to acquire certain real estate assets in exchange for 11,564,000 unicoins. On April 23, 2024, the parties amended the Agreement to include a condition requiring that the deed to the assets be released to the Company upon the issuance of the unicoins to the Sellers and their subsequent listing and tradability on a token trading platform or exchange. As of the date of this report, the transaction has not closed, title has not been transferred, and no unicoin rights have been issued in connection with the transaction. Accordingly, management has not met the control criteria for recognition of this transaction in the consolidated balance sheet.

 

  ● “Club 51”: On October 20, 2023, the Company entered into an asset swap agreement with International Mame Industry SAPI de CV, a company organized under the laws of Mexico, pursuant to which the Company agreed to acquire 20% of the equity interest in the Club 51 business, controlled by International Mame Industry SAPI de CV and its subsidiaries. The Club 51 business, which consists of a series of exclusive business clubs, is currently distributed among multiple entities, and is to be reorganized and consolidated prior to closing, such that the Company is to receive a 20% ownership interest in the Club 51 businesses, in exchange for 100,000,000 unicoins. This transaction remains in the due diligence phase, as the corporate consolidation of the Club 51 entities remains incomplete. Accordingly, management has not met control criteria for recognition of this transaction in the consolidated balance sheet.
     
  ● “Antigua”: On October 16, 2023, the Company entered into an asset swap agreement with Five Island Lands Trust (referred to in this paragraph only as the “Investor”) pursuant to the Company’s 140 Program. The agreement provided that the Company, as the issuer of unicoins, warranted that the ICO would be launched on or before November 15, 2023. If the ICO did not occur by the specified date, the Agreement required the parties to negotiate a new ICO date in good faith within 45 days of the original ICO date. The parties were unable to reach an agreement on a new ICO date. While the agreement does not expressly state that the failure to launch by the ICO date would terminate the Agreement, it does provide that “failure to effect the planned ICO” permits the parties to “challenge the agreement.” As of the date of this report, the transaction has not closed, title to the assets has not transferred, no unicoin rights have been issued, and the agreement remains subject to potential challenge. Accordingly, management has not met the control criteria for recognition of this transaction in the consolidated balance sheet. 
     
  ● “Eden Grand Resort”: On August 31, 2023 the Company entered into an asset swap agreement with Mr. Mohammad Al Saeed Adnan and Mr. Chai Trongchitnimit, pursuant to which the Company agreed to acquire certain real estate assets in Chonburri, Thailand in exchange for 671,206,755 unicoins. The assets are to be delivered to Genniwine Inc., a corporation organized under the laws of Thailand, of which the Company controls 49% pursuant to a shareholder agreement in which Alex Konanykhin, acting for the Company, receives the full economic benefits of Genniwine. The assets consist of a development project for a 6-story condominium resort which is under construction, with the unicoins payable in three tranches: (i) 34% deliverable at closing and transfer of title to the Property; (ii) 33% deliverable when construction of the structures proposed to be built on the property is 50% complete; and (iii) 33% deliverable when construction of the structures proposed to be built on the property is 100% complete. Deeds to the assets are currently held in escrow pending delivery of unicoin tokens. The escrow arrangement terminates if tokenized coins not delivered by April 30, 2024, but only with notice from the escrow agent that the transaction is terminated, which notice has not yet been provided. Accordingly, management has not met control criteria for recognition of this transaction in the consolidated balance sheet.
     
  ● “Finca La Esperanza”: On July 27, 2023, the Company entered into an agreement with Eugenio de la Torre (referred to in this paragraph only as the “Investor”), pursuant to which the Company agreed to issue 36,400,000 unicoins rights in exchange for real estate assets consisting of the agricultural farm known as “Finca La Esperanza,” located in Cumaribo, Vichada, Colombia. The assets were transferred to the Company by deed on October 23, 2023, and recorded with the local registry in February 2024. The agreement includes a project failure clause, which stipulates that if the unicoin token was not both tokenized and released for trading within 12 months of the agreement date, the transaction would be deemed terminated, requiring each party to return their respective contributions. As the 12-month period has now lapsed without the token being released for trading, the agreement is deemed terminated in accordance with its terms. This triggers reversionary rights: the real estate assets are to be returned to the Investor, and the 36,400,000 unicoins rights are to be returned to the Company. Management is currently evaluating next steps, including the legal and logistical process for effecting the reversals, the accounting implications of the transaction, and whether it may be appropriate to engage the Investor in discussions regarding the potential modification or removal of the clawback provisions under the agreement. Accordingly, management has not met control criteria for recognition of this transaction in the consolidated balance sheet.

 

  ● “Thai Villas”: On May 5, 2023, the Company entered into an asset swap agreement with M.E. Construction, a company organized under the laws of Thailand, pursuant to which the Company agreed to acquire certain real estate assets in Chonburri, Thailand in exchange for 12,800,000 unicoins. The assets are to be delivered to Genniwine Inc., a corporation organized under the laws of Thailand, of which the Company controls 49% pursuant to a shareholder agreement in which Alex Konanykhin, acting for the Company, receives the full economic benefits of Genniwine. The assets are eight villas under construction, with the unicoins payable in two tranches: (i) 60% payable upon execution of the transaction, and (ii) 40% payable upon completion of construction and delivery of the completed assets to the Company. Deeds to the assets are currently held in escrow pending delivery of unicoin tokens. The escrow arrangement terminates if tokenized coins not delivered by April 30, 2024, but only with notice from the escrow agent that the transaction is terminated, which notice has not yet been provided. Accordingly, management has not met control criteria for recognition of this transaction in the consolidated balance sheet.