Key Takeaways:
- The SEC settled charges against TrueCoin and TrustToken for misrepresenting TrueUSD’s (TUSD) backing and selling unregistered investment contracts.
- Companies falsely claimed TUSD was fully backed by U.S. dollars, while funds were invested in a high-risk overseas fund.
- TrueCoin and TrustToken agreed to financial settlements, each paying $163,766 in penalties without admitting guilt.
The SEC has settled charges against TrueCoin and TrustToken related to unregistered investment contracts linked to the TrueUSD (TUSD) stablecoin.
From November 2020 to April 2023, the companies allegedly misrepresented TUSD as fully backed by U.S. dollars, while the funds were invested in a high-risk overseas fund.
Just in: @SECGov charges @TrustToken and #TrueCoin for defrauding investors in a #stablecoin investment program and for an unregistered offer and sale of securities.
— Dan Spuller (@DanSpuller) September 24, 2024
📎Full Release: https://t.co/ckANJsnhh8$TRU #TruUSD #TUSD $TUSD #DeFi pic.twitter.com/5ci4f42UBK
By late 2022, they became aware of potential redemption issues, yet 99% of the backing assets were invested abroad by September 2024.
Additionally, the companies sold TUSD operations to an offshore entity, linked to Justin Sun.
Without admitting guilt, both companies agreed to civil penalties, totaling $163,766 each, along with other financial settlements.
TUSD had faced troubles throughout 2023, including losing its peg due to issues with its custodian and challenges in providing real-time attestations.
Despite these problems, Binance did not fully delist the coin but removed several TUSD trading pairs.
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