TrustToken, TrueCoin Settle With SEC Over Fraud Accusations in Stablecoin Investing
Summary
TrustToken and TrueCoin, now under Archblock, settled SEC accusations of misrepresenting the backing of the TrueUSD (TUSD) stablecoin and offering unregistered securities. The firms claimed TUSD had one-to-one dollar reserves while investing in a risky offshore fund. They agreed to pay $163,766 each in fines, with TrueCoin returning nearly $400,000 in profits, pending court approval. The SEC stated both companies engaged in unregistered securities sales involving TUSD through the TrueFi platform and were aware of redemption issues in 2022. The SEC emphasized the importance of registration for investor protection, highlighting that over 13% of TUSD was linked to profit-seeking ventures on TrueFi. TUSD has struggled to maintain its $1 peg.
