SEC settles charges with TrueCoin and TrustToken over TrueUSD stablecoin

The U.S. Securities and Exchange Commission said it has reached a settlement with TrueCoin LLC and TrustToken Inc. after it filed charges against the latter for selling the stablecoin TrueUSD. The SEC noted that TrueCoin is the issuer of TrueUSD (TUSD) and TrustToken is the developer of the lending protocol TrueFi. Neither TrueCoin nor TrustToken admitted or denied the agency's allegations and agreed to pay a fine of $163,766 each. TrueCoin also agreed to pay $340,930 in ill-gotten gains, according to a statement released by the SEC on Tuesday. From November 2020 to April 2023, TrueCoin and TrustToken “engaged in the offer and sale of unregistered investment contracts in the form of the crypto asset TUSD on TrueFi, as well as profit opportunities related to TrueUSD.” The SEC said the two companies also “falsely promoted the investment opportunity as safe and secure” and fully backed by U.S. dollars or dollar-equivalent assets, when in fact, most of the assets were invested in “speculative and high-risk offshore investment funds to earn additional returns. By September 2024, 99% of the foreign exchange reserves backing TUSD were allegedly invested in speculative funds.” (The Block)