As a seasoned crypto investor with a decade of experience under my belt, I have witnessed both the exhilarating highs and crushing lows that come with this wild frontier. The recent SEC charges against TrueCoin and TrustToken serve as yet another reminder of the importance of due diligence when navigating the crypto landscape.
In simpler terms, the U.S. Securities and Exchange Commission (SEC) has accused two cryptocurrency firms, TrueCoin and TrustToken, of running a deceptive stablecoin investment scheme and selling unregistered securities.
As stated in a recent announcement from the agency, the Securities and Exchange Commission (SEC) has filed a lawsuit at the U.S. District Court for the Northern District of California, and they have agreed to settle charges against the companies involved. The settlement requires these firms to collectively pay a fine amounting to $700,000.
SEC Charges TrueCoin and TrustToken
TrustToken, creator of the lending protocol TrueFi, is responsible for the issuance of TrueCoin’s stablecoin, TrueUSD (TUSD). This partnership launched TUSD back in 2018. However, from November 2020 to April 2023, the Securities and Exchange Commission claimed that they were involved in an unregistered offering and sale of profit-making chances and investment contracts through the distribution of the stablecoin TUSD.
According to TrustToken, TUSD was the initial USD-backed stablecoin to provide daily reports on its reserves from independent external organizations. However, the Securities and Exchange Commission (SEC) alleges that this is not true in their lawsuit.
The agency claimed that TrustToken and TrueCoin misrepresented TUSD as a token fully backed by US dollars, when in reality, a significant portion of the funds supporting the token were invested in a speculative venture. The individuals running the TrueFi protocol utilized the USD intended to back TUSD for betting on a high-risk offshore investment fund in an effort to generate extra profits.
By the time the creators of TrueFi sold TUSD operations to an offshore company in March 2022, they had invested more than $500 million of the funds meant to back the stablecoin. Unfortunately, TrustToken and TrueCoin discovered redemption problems at the offshore fund later that year. Still, they continued to mislead TUSD investors with false statements about the stablecoin being backed 1:1 by the USD.
According to the SEC, by September 2024, TrustToken and TrueCoin were reported to have allocated nearly all (99%) of the assets securing TUSD into a high-risk investment fund.
TrueCoin and TrustToken Settle With SEC
As a crypto investor, I’ve learned that some crypto firms have reached an agreement with the Securities and Exchange Commission (SEC), accepting charges for civil penalties, returning what was earned (disgorgement), and paying interest before any judgment is made (prejudgment interest).
Jorge Tenreiro, head of the SEC’s Crypto Assets & Cyber Unit, stated that this case underscores the significance of registration. It’s crucial because investors in such products are often left without essential information to make well-informed investment decisions.
Some cryptocurrency initiatives, such as the decentralized exchange Curve Finance, are contemplating deleting TUSD (TrueUSD) from their list of collateral tokens due to the SEC’s (Securities and Exchange Commission) charges against it.
Read More
- PENDLE PREDICTION. PENDLE cryptocurrency
- Skull and Bones Players Report Nerve-Wracking Bug With Reaper of the Lost
- SOLO PREDICTION. SOLO cryptocurrency
- W PREDICTION. W cryptocurrency
- NBA 2K25 Review: NBA 2K25 review: A small step forward but not a slam dunk
- Why has the smartschoolboy9 Reddit been banned?
- Understanding Shinjiro: The Persona 3 Character Debate
- Unlocking Destiny 2: The Hidden Potential of Grand Overture and The Queenbreaker
- Mastering Destiny 2: Tips for Speedy Grandmaster Challenges
- Rainbow Six Siege directory: Quick links to our tips & guides
2024-09-30 07:24