The complaint also claims that TrueCoin and TrustToken misrepresented the investment opportunity as secure and reliable, asserting that TUSD was entirely backed by U.S. dollars or their equivalents.
The Securities and Exchange Commission has announced that it has reached a settlement with TrueCoin LLC and TrustToken Inc. regarding their fraudulent and unregistered sales of investment contracts tied to TrueUSD (TUSD), which is claimed to be a stablecoin.
The SEC's complaint, submitted in the U.S. District Court for the Northern District of California, identifies TrueCoin as the issuer of TUSD and TrustToken as the developer and operator of TrueFi, a lending protocol. The complaint states that from November 2020 to April 2023, both TrueCoin and TrustToken participated in the unregistered offering and sale of investment contracts related to the crypto asset TUSD, as well as profit-making opportunities associated with TrueUSD on the TrueFi platform.
“TrueCoin and TrustToken sought profits for themselves by exposing investors to substantial, undisclosed risks through misrepresentations about the safety of the investment,” said Jorge G. Tenreiro, Acting Chief of the SEC’s Crypto Assets & Cyber Unit.
The complaint also claims that TrueCoin and TrustToken misrepresented the investment opportunity as secure and reliable, asserting that TUSD was entirely backed by U.S. dollars or their equivalents. In reality, a significant portion of the assets that were said to support TUSD had been funneled into a high-risk offshore investment fund to generate extra profits for the defendants.
According to the complaint, by around March 2022, after the TUSD operations were transferred to an offshore entity, that entity and TrueCoin had allocated over half a billion dollars of the assets supposedly backing TUSD into this speculative fund.
Jorge G. Tenreiro, Acting Chief of the SEC’s Crypto Assets & Cyber Unit added, “This case is a prime example of why registration matters, as investors in these products continue to be deprived of the key information needed to make fully informed decisions.”
Furthermore, by Fall 2022, TrueCoin and TrustToken were aware of issues with redeeming funds at the offshore investment but continued to mislead investors by claiming that TUSD was fully backed one-for-one by U.S. dollars. Allegedly, by September 2024, 99% of the reserves supporting TUSD were tied up in this speculative fund.
TrueCoin and TrustToken have reached a settlement regarding the SEC's charges, neither admitting nor denying the allegations. They have consented to final judgments that prohibit them from breaching relevant federal securities laws and will each pay civil penalties of $163,766. Additionally, TrueCoin will pay $340,930 in disgorgement along with prejudgment interest amounting to $31,538. These settlements are pending court approval.
The SEC's ongoing investigation is being led by Michael C. Baker, Michael Friedman, Pasha Salimi, and Bryan Hsueh, with oversight from Michael Brennan, James Connor, and Mr. Tenreiro.
THANK YOU FOR YOUR TIME
DISCLAIMER
The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of The Steven Wick Blog. Any content provided by our bloggers or authors are of their opinion and are not intended to malign any religion, ethnic group, club, organization, company, individual or anyone or anything.
If you decide to purchase any item using our authorized referral/affiliate links, be aware, we may receive a portion of the sales as commission, i.e. if you purchase a product/service.
To shop, select or click buttons, links or images, you will be redirected to product pages. Please, carefully research before you purchase. Feel free to share and leave a comment, we would love to hear from you. Your feedback is very important to us.
For more like this, music, literature, news, fashion, savvy political commentary, and fascinating features, sign up for the Steven Wick News Letter.
We here at the Steven Wick Blog are so proud of our work, we’d like to thank you for being a part of our community. However, our mission to share so much from music, literature, lifestyle to fashion is a 24/7 undertaking! We need your help to continue our work. Your financial donation will help us not only keep the lights on, but enable us run many more stories in the future to come. DONATE HERE
Message Of Gratitude
We deeply appreciate your contribution in making our blog the top brand among customers.
Without you as our readers, we wouldn't have achieved this level of success. Your satisfaction is our utmost priority, and we assure you that we will always be a reliable source for your entertainment needs.
Your trust in us is invaluable, and we are grateful for your generous donations as our readers.
A number of you took an extra effort and opted to contribute as monthly donors. By doing so, your generous contribution is multiplied by twelve throughout the year, thereby amplifying the impact you have on our work. Your dedication truly makes a significant change, and we sincerely appreciate your valuable support.
Your support has been instrumental in our brand's success.
Thank you for being with us throughout the past year.
As we continue to grow and enhance our business, we pledge to prioritize your needs and interests.
Best Regards
The Steven Wick Team
Comments