TrustToken and TrueCoin Settle Charges with SEC

Reading Time: < 1 minute

The SEC has announced that they have reached a settlement with crypto companies Trusttoken Inc. and Truecoin LLC regarding charges of fraudulent misrepresentations and unregistered sales related to the stablecoin trueusd (TUSD).

The complaint, released on Tuesday, alleges that Truecoin and Trusttoken marketed TUSD as a stablecoin fully backed by US dollars, when in reality a significant portion of the assets were invested in a speculative offshore fund.

From November 2020 to April 2023, the companies reportedly sold investment contracts tied to TUSD and the Truefi lending platform without proper registration.

The SEC claims that, by Fall 2022, the companies were aware of issues with redemption from the offshore fund, but continued to make false statements about TUSD’s backing.

By September 2024, the SEC states that 99% of the reserves were invested in the risky fund, exposing investors to undisclosed risks. Without admitting or denying the charges, Truecoin and Trusttoken have agreed to settle by paying penalties and disgorgement.