TrustToken and TrueCoin Settle SEC Fraud Charges Over USD Stablecoin

The companies will pay nearly $700,000 in penalties for misrepresenting the backing of TrueUSD and selling unregistered securities.

The SEC accused TrustToken and TrueCoin of defrauding investors by falsely claiming TrueUSD was backed one-to-one by US dollars.
Both companies settled the charges without admitting or denying the allegations, agreeing to pay $163,000 each, plus additional disgorgement and interest.
The SEC's complaint revealed that by September 2024, 99% of TrueUSD's reserves were invested in a speculative offshore fund.
The stability of TrueUSD was questioned earlier this year after it depegged, highlighting issues with the token's off-chain liquidity.
TrueCoin and TrustToken were also charged with unregistered sales of securities tied to TrueUSD through the TrueFi lending protocol.