The Securities and Exchange Commission (SEC) has reached a settlement with TrueCoin and TrustToken for their unregistered sales of investment contracts involving the TrueUSD stablecoin.
The complaint was filed by the SEC in a Northern California District Court, and both parties agreed to resolve the charges on September 24 instead of going through a trial.
According to the SEC, TrueCoin and TrustToken had been offering and selling unregistered investment contracts in the form of TrueUSD (TUSD) since November 2020 until April 2023. These contracts promised profit opportunities related to TrueUSD on the TrueFi lending protocol.
The SEC also accused the companies of false marketing, alleging that they had falsely claimed TUSD was backed by US dollars or their equivalent. In reality, the funds backing the stablecoin were invested in a risky overseas investment fund.
The investigation revealed that by September 2024, the companies were aware of potential issues with TUSD redemption.
