The US Securities and Exchange Commission (SEC) has settled with TrueCoin and TrustToken, the companies behind the TrueUSD stablecoin, for $700,000.
The official release notes that the promoters associated with the TrueUSD (TUSD) stablecoin allegedly misrepresented the token’s stability and misled investors.
According to the complaint filed in US District Court. TrueCoin and TrustToken of the Northern District of California participated in the unregistered offering and sale of investment contracts in the form of TUSD crypto assets. They also participated in “profit making opportunities” with respect to TrueUSD from November 2020 to April 2023.
Jorge G. Tenreiro, Acting Chief of the SEC’s Crypto Division, emphasized the importance of registration to avoid disappointing investors.
“TrueCoin and TrustToken sought to profit by exposing investors to significant, uncertain risk by misrepresenting the safety of their investments.
The SEC calls TrueUSD a “presumptive stablecoin.”
The securities regulator called TrueUSD an “alleged stablecoin” for falsely marketing an investment opportunity as safe and reliable. bitcoin price
According to the complaint, both sponsors claimed that TUSD is funded entirely in US dollars. or their equivalents. However, a significant portion of the assets supporting TUSD are invested in risky and risky offshore investment funds.
The complaint alleges that by March 2022, offshore businesses and TrueCoin had invested more than half a billion dollars in assets backed by TrueUSD in a hedge fund.
“TrueCoin and TrustToken acknowledged problems with redemptions in an offshore fund, but continued to make false statements to investors who held TUSD as individually backed by USD.”
In addition, by September 2024, 99% of the reserves supporting TUSD will be invested in the speculation fund.
TrueCoin and TrustToken have neither denied nor acknowledged the SEC’s allegations. They agreed to settle the regulatory charges with civil penalties of $163,766 each. In addition, TrueCoin agreed to pay $340,930 and prejudgment interest in the amount of $31,538.
The TrueUSD stablecoin has a market cap of $495 million and has recovered from a small slump following the news. TUSD is currently trading at $0.99 at press time.