Federal securities regulators have reached an settlement with TrueUSD (TUSD) issuer TrueCoin and lending protocol operator TrustToken to settle expenses for the alleged and fraudulent sale of unregistered funding contracts.
The US Securities and Trade Fee (SEC) accuses TrueCoin and TrustToken of providing and promoting TUSD as an unregistered safety from November 2020 to April 2023.
The regulator says that whereas TrueCoin and TrustToken claimed that TrueUSD was absolutely backed by the U.S. greenback, a considerable portion of the belongings purportedly backing TUSD had been invested in a speculative and dangerous offshore funding fund to generate extra earnings.
The SEC alleges that TrueCoin and TrustToken discovered of redemption issues on the offshore fund in 2022 however continued making claims that TUSD is backed one-for-one by the U.S. greenback.
By March 2022, greater than half a billion {dollars} of the belongings supposedly backing TUSD had been invested within the speculative fund. The SEC says that by September 2024, 99% of the reserves backing the stablecoin are already invested within the offshore fund.
In a assertion, the SEC says TrueCoin and TrustToken agreed to settle the fees with out admitting or denying the allegations albeit the settlements are nonetheless topic to court docket approval.
“TrueCoin and TrustToken have agreed to settle the SEC’s expenses by consenting to the entry of ultimate judgments enjoining them from violating relevant provisions of the federal securities legal guidelines and to pay civil penalties of $163,766 every. TrueCoin has agreed to pay disgorgement of $340,930 with prejudgment curiosity of $31,538.”
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