The securities regulator claims the token is undercollateralized and its backing funds are in a risky overseas investment.
The United States Securities and Exchange Commission (SEC) settled charges against TrueCoin and TrustToken for fraudulent and unregistered sales of investment contracts involving the TrueUSD stablecoin.
The SEC filed a complaint against the companies in the District Court for Northern California and settled the charges both on Sept. 24, after the defendants declined to have the case decided by a judge.
According to the SEC, TrueCoin and TrustToken offered and sold unregistered investment contracts in the form of TrueUSD (TUSD) from November 2020 until April 2023 with “profit-making opportunities with respect to TrueUSD on TrueFi.” TrueFi is a lending protocol.
