- The SEC filed expenses in opposition to TrueCoin and TrustToken over fraud and providing unregistered funding contracts.
- TrueCoin points the TrueUSD (TUSD) stablecoin, whereas TrustToken operates the TrueFi lending protocol.
- The regulator alleges that stablecoin TUSD had invested 99% of its reserves in offshore funds by September 2024.
The Securities and Change Fee (SEC) has accused crypto firms TrueCoin and TrustToken of defrauding their traders in a stablecoin-related funding program.
considered one of Press release On Tuesday, September 24, 2024, the SEC stated it has charged each firms with fraud and providing unregistered funding contracts on the stablecoin TrueUSD (TUSD). A number of exchanges have Integrated TUSD.
99% of TUSD reserves invested in speculative funds
In line with the SEC, TUSD issuers TrueCoin and Lending Protocol TrueFi Operator TrustToken supplied unregistered funding contracts on TUSD between November 2020 and April 2023. Relating to the crypto firms that supplied them, the regulator says they packaged the sale of TUSD as “a possibility to make a revenue.”
These choices have been falsely marketed as safe, with the TUSD issuer claiming the stablecoin was 100% backed by the US greenback.
Nonetheless, as alleged within the expenses filed within the US District Court docket for the Northern District of California, a lot of the property backing the tokens have been put right into a speculative offshore funding fund. As a substitute, TrueCoin and TrustToken used these investments to earn returns for themselves.
“TrueCoin and TrustToken sought to revenue for themselves by exposing traders to substantial, undisclosed dangers by misrepresentations in regards to the security of investments,” stated George G. Tenreyro, Performing Chief of the SEC’s Crypto Property and Cyber Unit.
The SEC claims that by September 2024, the defendants held 99% of the alleged TUSD reserves in speculative funds.
Each TrueCoin and TrustToken have reportedly agreed to a settlement with the SEC. This consists of civil penalties within the quantity of $163,766 on every. TUSD issuer TrueCoin will even pay $340,930 as disgorgement and $31,538 in prejudgment curiosity.
