{"id":463197,"date":"2024-09-26T11:00:47","date_gmt":"2024-09-26T11:00:47","guid":{"rendered":"https:\/\/www.crypto-news-flash.com\/?p=861177"},"modified":"2024-09-26T11:00:47","modified_gmt":"2024-09-26T11:00:47","slug":"sec-settlement-with-trusttoken-the-truth-behind-tusd-reserves","status":"publish","type":"post","link":"https:\/\/e-bitco.in\/index.php\/2024\/09\/26\/sec-settlement-with-trusttoken-the-truth-behind-tusd-reserves\/","title":{"rendered":"SEC Settlement with TrustToken: The Truth Behind TUSD Reserves"},"content":{"rendered":"<div><img decoding=\"async\" src=\"https:\/\/www.crypto-news-flash.com\/wp-content\/uploads\/2019\/04\/h_f_a-trueUSD-2-1.jpg\" class=\"ff-og-image-inserted\"><\/div>\n<ul>\n<li><strong>The SEC settled with TrustToken and TrueCoin for misleading investors about TrueUSD\u2019s (TUSD) reserve backing.<\/strong><\/li>\n<li><strong>By September 2024, 99% of TUSD\u2019s backing was invested in a risky offshore fund, contrary to claims.<\/strong><\/li>\n<\/ul>\n<hr>\n<p>The Securities and Exchange Commission (SEC) has <a href=\"https:\/\/x.com\/CryptoAnup\/status\/1838642149581058336\">struck a settlement<\/a> with crypto firms TrustToken and TrueCoin, who were accused of deceiving investors about the stablecoin TrueUSD (TUSD).<\/p>\n<p>According to the SEC, by September 2024, about 99% of the reserves that were meant to underpin the TUSD had been put in a speculative offshore fund.<\/p>\n<p>This disclosure happened despite the corporations\u2019 previous statements that the stablecoin was completely backed one-to-one by US dollars, raising severe concerns about the transparency and risk exposure of these investments.<\/p>\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">\ud83d\udea8Just In: <a href=\"https:\/\/twitter.com\/hashtag\/SEC?src=hash&amp;ref_src=twsrc%5Etfw\">#SEC<\/a> Charges TrustToken and TrueCoin with Investor Fraud Over Stablecoin Programs. <a href=\"https:\/\/twitter.com\/hashtag\/cryptocurrency?src=hash&amp;ref_src=twsrc%5Etfw\">#cryptocurrency<\/a> <a href=\"https:\/\/t.co\/yRlcewtefI\">pic.twitter.com\/yRlcewtefI<\/a><\/p>\n<p>\u2014 Anup Dhungana (@CryptoAnup) <a href=\"https:\/\/twitter.com\/CryptoAnup\/status\/1838642149581058336?ref_src=twsrc%5Etfw\">September 24, 2024<\/a><\/p>\n<\/blockquote>\n<h2><strong>TrustToken and TrueCoin Misled Investors Despite Awareness of Redemption Issues&nbsp;<\/strong><\/h2>\n<p>The SEC investigation discovered that from November 2020 to April 2023, TrustToken and TrueCoin offered and sold investment contracts connected to TUSD without legal registration.<\/p>\n<p>It was discovered that by March 2022, after the <span><a href=\"https:\/\/www.crypto-news-flash.com\/breaking-news-justin-sun-faces-charges-of-covertly-acquiring-stablecoin-tusd\/\">TUSD<\/a><\/span> operations were transferred to an offshore firm, more than half a billion dollars in assets presumably backing the stablecoin had been shifted into a speculative fund.<\/p>\n<p>Even after becoming aware of redemption problems with this fund in the fall of 2022, TrustToken and TrueCoin persisted in trying to persuade investors that <span><a href=\"https:\/\/www.crypto-news-flash.com\/trueusd-tusd-stablecoin-depreciates-to-0-995-is-bitcoin-and-the-xrp-market-in-danger\/\">TUSD<\/a><\/span> was 100% backed by US dollars.<\/p>\n<p>This misinformation exposed investors to significant unknown risks, contradicting the companies\u2019 marketing promises about TUSD\u2019s stability and safety.<\/p>\n<p>Jorge G. Tenreiro, Acting Chief of the SEC\u2019s Crypto Assets &amp; Cyber Unit, noted that these fraudulent acts showed the risks of such behavior in the crypto industry. He stated:<\/p>\n<blockquote>\n<p>\u201cTrustToken and TrueCoin sought profits for themselves by exposing investors to substantial, undisclosed risks.\u201d<\/p>\n<\/blockquote>\n<h3><strong>Settlement Fines and TUSD\u2019s Tarnished Reputation Revealed<\/strong><\/h3>\n<p>TrustToken and TrueCoin each agreed to pay $163,766 in civil fines as part of the settlement. TrueCoin is also forced to disgorge $340,930 plus $31,538 in prejudgment interest. It\u2019s important to emphasize that, while both corporations agreed to the settlement terms, they didn\u2019t admit or deny the SEC\u2019s charges.<\/p>\n<p>The settlement includes injunctions against future violations of federal securities laws, which is a significant step toward holding cryptocurrency firms accountable for their activities.<\/p>\n<p>This lawsuit has tarnished TUSD\u2019s reputation, especially as TUSD positioned itself as a stablecoin wholly backed by US dollars or equivalent assets. Earlier this year, as we previously <span><a href=\"https:\/\/www.crypto-news-flash.com\/trueusd-tusd-struggles-to-hold-1-peg-as-exchange-activity-heats-up\/\">reported<\/a><\/span>, TUSD\u2019s stability was called into doubt when it witnessed a depegging event, temporarily falling below the $1 threshold.<\/p>\n<p>Although the corporation claimed to be the \u201cfirst\u201d dollar-backed stablecoin with \u201clive on-chain attestations,\u201d the recent SEC case reveals significant differences between its promises and actual actions.<\/p>\n<p>The SEC\u2019s complaint also claimed that TUSD was provided alongside profit-making opportunities, which might qualify it as a security under the Howey test. This development places TUSD within the SEC\u2019s regulatory framework, strengthening the agency\u2019s position that certain crypto assets are subject to securities law.<\/p>\n<div class=\"tve-leads-shortcode tve-leads-triggered tve-tl-anim tl-anim-instant tve-leads-track-shortcode_228374\">\n<div class=\"tl-style\" id=\"tve_tcb2_set-001\" data-state=\"50\" data-form-state>\n<div class=\"tve-leads-conversion-object\" data-tl-type=\"shortcode_228374\">\n<div class=\"tve_flt\">\n<div id=\"tve_editor\" class=\"tve_shortcode_editor\">\n<div class=\"thrv-leads-form-box tve_no_drag tve_no_icons thrv_wrapper tve_editor_main_content thrv-leads-in-content tve_empty_dropzone\" data-css=\"tve-u-185a09262cb\">\n<div class=\"thrv_wrapper thrv_text_element\">\n<p data-css=\"tve-u-185a09262d4\"><span data-css=\"tve-u-185a09262d5\">&nbsp; &nbsp; &nbsp; &nbsp; &nbsp; No spam, no lies, only insights. You can unsubscribe at any time.<\/span><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<p><a href=\"https:\/\/www.crypto-news-flash.com\/\">Source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The SEC settled with TrustToken and TrueCoin for misleading investors about TrueUSD\u2019s (TUSD) reserve backing. By September 2024, 99% of TUSD\u2019s backing was invested in a risky offshore fund, contrary to claims. The Securities and Exchange Commission (SEC) has struck a settlement with crypto firms TrustToken and TrueCoin, who were accused of deceiving investors about [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":463198,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[25,277,21605,7859,6835],"class_list":{"0":"post-463197","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-other","8":"tag-news","9":"tag-sec","10":"tag-truecoin","11":"tag-trusttoken","12":"tag-tusd"},"_links":{"self":[{"href":"https:\/\/e-bitco.in\/index.php\/wp-json\/wp\/v2\/posts\/463197","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/e-bitco.in\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/e-bitco.in\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/e-bitco.in\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/e-bitco.in\/index.php\/wp-json\/wp\/v2\/comments?post=463197"}],"version-history":[{"count":0,"href":"https:\/\/e-bitco.in\/index.php\/wp-json\/wp\/v2\/posts\/463197\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/e-bitco.in\/index.php\/wp-json\/wp\/v2\/media\/463198"}],"wp:attachment":[{"href":"https:\/\/e-bitco.in\/index.php\/wp-json\/wp\/v2\/media?parent=463197"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/e-bitco.in\/index.php\/wp-json\/wp\/v2\/categories?post=463197"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/e-bitco.in\/index.php\/wp-json\/wp\/v2\/tags?post=463197"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}