TrueCoin and TrustToken Settle SEC Fraud Charges

user avatar

by Giorgi Kostiuk

2 years ago

Made with AI

  1. SEC Charges
  2. Violations and Misleading Statements
  3. Consequences and Previous Cases


    4. The U.S. Securities and Exchange Commission (SEC) announced today that TrueCoin LLC and TrustToken Inc. have agreed to settle charges of fraud and unregistered investment contract sales related to the TrueUSD (TUSD) stablecoin.

    SEC Charges

    TrueCoin is the issuer of TUSD, while TrustToken operates the lending protocol TrueFi, functioning within the cryptocurrency ecosystem. According to the complaint filed by the SEC in the U.S. District Court for the Northern District of California, from November 2020 to April 2023, TrueCoin and TrustToken engaged in the offering and sale of unregistered investment contracts in the form of TUSD crypto assets.

    Violations and Misleading Statements

    The SEC alleges that both companies wrongly marketed TUSD as a safe investment by claiming that the stablecoin was fully backed by U.S. dollars, while most of the assets backing TUSD were invested in risky speculative funds overseas. In March 2022, after selling TUSD operations to a foreign entity, TrueCoin and TrustToken invested more than half a billion dollars of the assets backing TUSD in these funds.

    At the end of 2022, despite knowing about redemption issues in these funds, the companies continued to make misleading statements to investors, claiming that TUSD was backed 1:1 by U.S. dollars.

    "TrueCoin and TrustToken sought to profit for themselves by exposing investors to significant risks through misrepresentations about the safety of the investment."Jorge G. Tenreiro, Acting Chief of the SEC’s Crypto Assets and Cyber Unit

    Consequences and Previous Cases

    Without admitting or denying the charges, TrueCoin and TrustToken agreed to settle the SEC charges by agreeing to a court order barring them from violating applicable federal securities laws. They also agreed to pay fines of $163,766 each.

    Additionally, TrueCoin agreed to pay disgorgement of $340,930 and pretrial interest of $31,538. This settlement awaits court approval.

    The case drew attention amid the SEC’s increasing focus on unregistered operations in the cryptocurrency sector. Previously, the SEC had filed similar charges against Rari Capital, a decentralized finance (DeFi) protocol, for fraud and unregistered broker activities.

    The cases of TrueCoin and TrustToken, along with Rari Capital, highlight the SEC's growing scrutiny and strict enforcement actions regarding law violations involving crypto assets and decentralized finance.

Tier I

Sector: #18291

Sealed Hiding Place Room

Resource Cache

Resource Cache

Tier I

Requires 25% Tier Progress to Claim
Meme Cache

Meme Cache

Tier I

Requires 50% Tier Progress to Claim
Equipment Cache

Equipment Cache

Tier I

Requires 75% Tier Progress to Claim

After collecting, hiding places will be stored in your inventory and can be opened with Keys.

Other news

Payward to Acquire Saldo Bank for European Banking Expansion

Payward, the parent company of Kraken, plans to acquire Lithuania-based Saldo Bank to enhance its banking capabilities and integrate banking products with crypto services.

user avatarMaria Fernandez

Germany's Sparkassen Group Begins Cryptocurrency Trading Rollout

Germany's Sparkassen savings bank group is starting a phased rollout of cryptocurrency trading within its existing banking app, beginning on October 19, 2023.

user avatarGustavo Mendoza

CME Group to Launch Bitcoin Cash and Uniswap Futures on October 19

CME Group has scheduled the introduction of Bitcoin Cash and Uniswap futures for October 19, providing institutional traders with more cryptocurrency markets.

user avatarRajesh Kumar

Ethereum's Glamsterdam Upgrade Scheduled for Hoodi Test Network

Ethereum's next major upgrade, Glamsterdam, is set to activate on the Hoodi test network on October 26, marking a significant step in testing changes to block production and execution costs.

user avatarMiguel Rodriguez

International Crackdown on West African Scam Networks Results in 28 Arrests

An international effort against West African scam networks has led to 28 arrests and the removal of over 37 million accounts linked to fraudulent activity.

user avatarLuis Flores

Stablecoin Payment Transactions Surge Despite Flat Supply

A new report reveals a significant increase in stablecoin payment transactions, contrasting with stagnant supply levels.

user avatarArif Mukhtar

Important disclaimer: The information presented on the Dapp.Expert portal is intended solely for informational purposes and does not constitute an investment recommendation or a guide to action in the field of cryptocurrencies. The Dapp.Expert team is not responsible for any potential losses or missed profits associated with the use of materials published on the site. Before making investment decisions in cryptocurrencies, we recommend consulting a qualified financial advisor.