According to PANews, the U.S. Securities and Exchange Commission (SEC) has accused TrueCoin LLC and TrustToken Inc., the companies behind TrueUSD, of making false statements regarding the stablecoin's backing. The SEC's investigation revealed that a significant portion of TrueUSD's reserves were invested in a high-risk offshore fund, contrary to claims that the stablecoin was fully backed by U.S. dollars or equivalent currency. TrueUSD representatives did not respond to requests for comment.
Austin Campbell, head of a blockchain consulting firm, commented on social media platform X, stating, 'The first rule is not to deceive your investors and users, and this clearly violates that rule. It's ironic that TrueUSD would do this.' Campbell suggested that if the SEC's allegations are accurate, this case represents a textbook example of fraud, not necessarily unique to cryptocurrency. However, due to the brand effect of 'cryptocurrency,' TrueUSD's situation highlights a problem specific to the crypto sector.
The media also referenced a previous report indicating that TrueUSD's ownership structure is complex and opaque, with control transferred to an offshore entity named Techteryx Ltd. and reserves moved to banks in the Bahamas. At the time, the company explained that the transfer was due to deteriorating banking conditions for U.S. crypto firms. The collapse of Silvergate Bank, Silicon Valley Bank, and Signature Bank had left many crypto companies scrambling for new banking solutions. TrueUSD's parent company, like many others, was urgently seeking alternatives to hold cash. While such actions might be rejected in other industries, many accepted them in TrueUSD's case. This acceptance is partly due to the core cryptocurrency principle of being trustless, meaning no need to trust third parties. Consequently, people believed that blockchain assets offered better solutions than traditional finance.