The US Securities and Change Fee (SEC) has charged TrueCoin and TrustToken with fraudulent and unregistered gross sales of funding contracts involving the TrueUSD (TUSD) stablecoin, and mendacity about its backing, based on a Sept. 24 assertion.
TrueCoin and TrustToken agreed to settle the SEC’s expenses with out admitting or denying fault. Additionally they consented to injunctions and $163,766 civil penalties every. TrueCoin can pay an extra $340,930 in disgorgement plus $31,538 in curiosity, pending court docket approval.
SEC grievance
The SEC’s grievance alleged that TrueCoin and TrustToken reportedly marketed TUSD as absolutely backed by US {dollars} or equivalents whereas a considerable portion was invested in a dangerous offshore fund.
By March 2022, over half a billion {dollars} of TUSD-backing belongings had been invested within the speculative fund. Regardless of consciousness of redemption points by the Fall of 2022, the businesses continued to misrepresent TUSD as one-to-one dollar-backed.
The regulator acknowledged that 99% of TUSD reserves had been within the speculative fund as of September 2024. It added that each entities mismanaged buyers’ funds by looking for earnings for themselves, which uncovered customers to “substantial, undisclosed dangers by way of misrepresentations concerning the security of the funding.”
Moreover, the SEC highlighted that from November 2020 to April 2023, the businesses engaged in unregistered presents and gross sales of TUSD funding contracts and profit-making alternatives on TrueFi, a decentralized cash market the place customers can lend stablecoins as credit score traces to firms to earn curiosity.
TrueUSD presently has a market cap of practically $494 million and is experiencing a slight de-peg following the information.
