The U.S. Securities and Exchange Commission (SEC) announced on the 24th local time that it had settled charges against TrueCoin LLC and TrustToken Inc., accusing them of fraudulent and unregistered sales of investment contracts involving the stablecoin TrueUSD (TUSD).
The SEC accused cryptocurrency companies TrustToken and TrueCoin of defrauding investors in their stablecoin investment plans. The content mentioned that 99% of the reserves behind the TrueUSD (TUSD) stablecoin were invested in a speculative overseas fund. This accusation triggered an investigation into TUSD. There are significant concerns behind the stability and transparency of the asset.
According to the SEC’s complaint filed in the U.S. District Court for the Northern District of California, TrueCoin is the issuer of TUSD and TrustToken is the developer and operator of the lending protocol TrueFi.
The SEC alleges that from November 2020 to April 2023, TrueCoin and TrustToken engaged in unregistered investment contracts offered and sold in the form of the cryptoasset TUSD, as well as profit opportunities on TrueFi regarding TrueUSD.
The indictment further alleges that TrueCoin and TrustToken falsely promoted investment opportunities as safe and secure, claiming that TUSD was fully backed by U.S. dollars or equivalent, when in fact a significant portion of the assets allegedly backing TUSD had been invested in speculative and risky offshore investments. fund to earn additional returns for the defendants.
The complaint alleges that by approximately March 2022, following the sale of the TUSD business to an offshore entity, the entity and TrueCoin had invested more than $500 million in assets purportedly backing TUSD in speculative funds, and by the fall of 2022, TrueCoin and Even after becoming aware of redemption issues from offshore funds, TrustToken continued to make false statements to investors, treating TUSD as being backed one-to-one by the U.S. dollar. It is alleged that by September 2024, 99% of the reserves backing TUSD were actually invested in a speculative and highly risky overseas investment fund to generate additional income for the defendants.
“TrueCoin and TrustToken enriched themselves by misrepresenting the safety of their investments and exposing investors to substantial and undisclosed risks,” said Jorge G. Tenreiro, acting director of the SEC’s Cryptoassets and Cyber Division. , “This case illustrates why legal registration is important, as investors in these products are still deprived of the critical information needed to make fully informed decisions.”
Without admitting or denying the allegations, TrueCoin and TrustToken have agreed to settle the SEC’s allegations, agreeing to a final judgment and enjoining them from violating applicable provisions of the federal securities laws, and to each pay a civil penalty of $163,766. TrueCoin further agreed to pay $340,930 in disgorgement and $31,538 in prejudgment interest. The settlements are subject to court approval.
"The U.S. SEC reached a settlement on TrueCoin and TrustToken's charges involving the stablecoin TrueUSD" This article was first published on "Blocker".
