Securities Regulatory Body Reaches Agreement with TrueCoin and TrustToken on TrueUSD-Related Allegations
The United States Securities and Exchange Commission (SEC) has announced a settlement with cryptocurrency companies TrueCoin and TrustToken over allegations of defrauding investors via investment contracts involving TrueUSD (TUSD).
According to the SEC, the alleged fraudulent activity took place from November 2020 to April 2023. During this period, TrueCoin and TrustToken engaged in the unregistered offer and sale of investment contracts in the form of TUSD and profit-making opportunities with respect to TrueUSD on TrueFi, a lending protocol developed and operated by TrustToken.
The SEC's allegations against the companies involved misrepresentations about the safety of the investment. They claimed that TUSD was fully backed by US dollars or their equivalent, but in reality, by September 2024, 99% of the reserves backing TUSD were invested in a speculative fund. By fall 2022, TrueCoin had invested over half a billion US dollars of the assets purportedly backing TUSD in this risky fund.
Following the SEC's announcement, the TUSD token dipped slightly to 0.9986 before bouncing back to 0.9991. In May of this year, TUSD was delisted from Binance as part of a compliance requirement, resulting in TUSD losing nearly 80% of its market capitalization.
As part of the settlement, TrueCoin and TrustToken agreed to settle with the SEC without admitting or denying the allegations. Each company will pay civil penalties: TrueCoin - $163,766, TrustToken - $163,766. Furthermore, TrueCoin will also pay a disgorgement of $340,930 with prejudgment interest of $31,538.
Jorge G. Tenreiro, Acting Chief of the SEC's Crypto Assets & Cyber Unit, stated that the companies sought profits by exposing investors to risks through these misrepresentations. He emphasised the importance of transparency and compliance in the crypto market.
The settlement was announced around late July 2025, marking the end of a long-standing case that has raised concerns about the regulation of cryptocurrencies and the need for transparency in the industry.
- In the crypto market, the SEC's settlement with TrueCoin and TrustToken over allegations of defrauding investors spotlights the importance of transparency, especially when it comes to news related to finance and technology, such as investment contracts and lending protocols.
- Despite the SEC's settlement with TrueCoin and TrustToken, the issue of business ethics in the technology sector remains a significant concern, especially when it involves the safety of investment and the potential impact on market capitalization, as seen with the delisting of TUSD from Binance in May 2025.
