Trust Broken! SEC Charges TrustToken – The TUSD Collapse Begins

The U.S. Securities and Exchange Commission (SEC) has charged TrustToken Inc. and TrueCoin LLC over fraudulent activities involving the TrueUSD (TUSD) stablecoin. According to the SEC, these companies falsely marketed TUSD as fully backed by U.S. dollars, while a substantial portion of the assets backing the coin had been invested in speculative offshore funds. This exposed investors to significant undisclosed risks.

Between 2020 and 2023, TrustToken and TrueCoin sold unregistered securities tied to TUSD, a stablecoin they claimed was secure and reliable. However, it was later revealed that by March 2022, more than $500 million of the backing reserves had been placed in risky investments. Despite redemption issues emerging in the offshore funds by late 2022, both companies continued to promote TUSD as fully backed by dollars.

The SEC emphasized that this case showcases the dangers of unregistered securities offerings, as investors were deprived of crucial information necessary for informed decision-making. TrustToken and TrueCoin settled the charges without admitting or denying the SEC's findings​

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