SEC charges TrustToken and TrueCoin with defrauding investors over stablecoin investment program.
SEC claims 99% of TUSD reserves were invested in speculative offshore fund.
Both companies, which were involved in the issuance and development of TrueUSD and the TrueFi lending protocol, respectively, have agreed to pay penalties and disgorgement without admitting or denying the SEC’s allegations.
The SEC accused TrueCoin and TrustToken of engaging in the unregistered offer and sale of investment contracts related to TrueUSD and its associated profit-making opportunities. The companies were also accused of making false and misleading statements about the safety and trustworthiness of the investment.
The SEC found that a significant portion of the assets backing TrueUSD were invested in a speculative and risky offshore investment fund, contrary to the claims made by TrueCoin and TrustToken. This exposure to undisclosed risks violated securities laws.
The SEC’s action highlights the importance of registration and transparency in the cryptocurrency market. Investors must have access to accurate information to make informed decisions.
