The US Securities and Exchange Commission has charged two crypto companies linked to the TUSD stablecoin with securities violations.
TrueCoin and TrustToken stable The U.S. Securities and Exchange Commission has filed a lawsuit against TrustToken, accusing it of making unregistered offers and selling investment contracts between November 2020 and April 2023. TrustToken created the decentralized finance lending platform TrueFi, which allows users to use TrueUSD (TUSD), a stablecoin issued by TrueCoin.
In a complaint filed by the SEC on September 24, the agency said both companies used misleading marketing tactics to promote TUSD and TrueFi as “safe and trustworthy” investment vehicles. Jorge G. Tenrero, acting chief of the SEC’s Crypto Assets and Internet Unit, said the case highlighted the importance of company registration to protect investors.
Cryptocurrency market participants, including former SEC staffers like Dan Gallagher, the current lead attorney at Robinhood Markets, have often challenged this rhetoric from SEC officials.
As a result of this conflict, ongoing legal battles have erupted, involving companies like Coinbase. Lawmakers have also taken the SEC to task over its “regulation by enforcement” approach, with SEC Commissioner Hester Peirce calling the regulator’s strategy ineffective and confusing.
TrueCoin and TrustToken, without admitting or denying the charges, agreed to pay fines of $163,766. TrueCoin was also fined an additional $340,930.
The settlement adds to a growing list of fines the SEC has levied against the cryptocurrency industry. Since 2013, crypto companies have paid the SEC more than $7 billion, and a study found that cryptocurrency fines have increased by more than 3,000% in the past 12 months.
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