{"id":172155,"date":"2024-09-25T12:48:01","date_gmt":"2024-09-25T12:48:01","guid":{"rendered":"https:\/\/crypto-economy.com\/?p=172155"},"modified":"2024-09-25T12:48:05","modified_gmt":"2024-09-25T12:48:05","slug":"trusttoken-and-truecoin-pay-700k-to-settle-sec-claims-of-investor-fraud","status":"publish","type":"post","link":"https:\/\/crypto-economy.com\/trusttoken-and-truecoin-pay-700k-to-settle-sec-claims-of-investor-fraud\/","title":{"rendered":"TrustToken and TrueCoin Pay $700K to Settle SEC Claims of Investor Fraud"},"content":{"rendered":"<p style=\"text-align: justify\"><span data-preserver-spaces=\"true\">TL;DR<\/span><\/p>\n<ul style=\"text-align: justify\">\n<li><strong><span data-preserver-spaces=\"true\">Fraudulent Claims<\/span><\/strong><span data-preserver-spaces=\"true\">: TrustToken and TrueCoin falsely marketed TrueUSD (TUSD) as fully backed by U.S.\u00a0dollars while investing in a risky offshore fund.<\/span><\/li>\n<li><strong><span data-preserver-spaces=\"true\">SEC Settlement<\/span><\/strong><span data-preserver-spaces=\"true\">: Both companies agreed to pay $163,766 each in civil penalties, with TrueCoin also paying $340,930 in disgorgement and $31,538 in interest.<\/span><\/li>\n<li><strong><span data-preserver-spaces=\"true\">Investor Protection<\/span><\/strong><span data-preserver-spaces=\"true\"><span data-preserver-spaces=\"true\">: The SEC emphasized the importance of registration to protect investors from undisclosed risks and ensure access to crucial information.<\/span><\/span><br \/>\n<hr \/>\n<\/li>\n<\/ul>\n<p style=\"text-align: justify\"><strong><span data-preserver-spaces=\"true\">The U.S. Securities and Exchange Commission (SEC) has <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.sec.gov\/files\/litigation\/complaints\/2024\/comp-pr2024-145.pdf\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">announced <\/span><\/a><span data-preserver-spaces=\"true\">a settlement with TrustToken Inc. and TrueCoin LLC<\/span><\/strong><span data-preserver-spaces=\"true\"> over allegations of investor fraud and unregistered sales of investment contracts involving the TrueUSD (TUSD) <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/crypto-economy.com\/stablecoins\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">stablecoin<\/span><\/a><span data-preserver-spaces=\"true\">. <\/span><!--more--><\/p>\n<p style=\"text-align: justify\"><strong><span data-preserver-spaces=\"true\">The SEC\u2019s complaint,<\/span><\/strong><span data-preserver-spaces=\"true\"> filed in the U.S. District Court for the Northern District of California, <\/span><strong><span data-preserver-spaces=\"true\">accused the companies of falsely marketing TUSD as fully backed by U.S. dollars<\/span><\/strong><span data-preserver-spaces=\"true\"> while investing a substantial portion of the assets in a speculative offshore investment fund.<\/span><\/p>\n<h2 style=\"text-align: left\"><span data-preserver-spaces=\"true\">Misleading Investors<\/span><\/h2>\n<p style=\"text-align: justify\"><span data-preserver-spaces=\"true\">From November 2020 to April 2023, TrueCoin and TrustToken allegedly engaged in the unregistered offer and sale of investment contracts in the form of TUSD and profit-making opportunities related to TrueUSD on the TrueFi lending protocol. <\/span><\/p>\n<p style=\"text-align: justify\"><strong><span data-preserver-spaces=\"true\">The SEC\u2019s complaint highlighted that by March 2022,<\/span><\/strong><span data-preserver-spaces=\"true\"> after the TUSD operations were sold to an offshore entity, <\/span><strong><span data-preserver-spaces=\"true\">more than half a billion dollars of the assets<\/span><\/strong><span data-preserver-spaces=\"true\"> backing TUSD <\/span><strong><span data-preserver-spaces=\"true\">were invested in the speculative fund<\/span><\/strong><span data-preserver-spaces=\"true\">. <\/span><\/p>\n<p style=\"text-align: justify\"><span data-preserver-spaces=\"true\">Despite being aware of redemption problems by Fall 2022, the companies continued to mislead investors by claiming TUSD was backed one-for-one by U.S. dollars.<\/span><\/p>\n<p><img fetchpriority=\"high\" decoding=\"async\" class=\"alignnone size-full wp-image-172156\" src=\"https:\/\/crypto-economy.com\/\/wp-content\/uploads\/2024\/09\/TrustTokenAndTrustCoinSettlement.jpg\" alt=\"TrustToken and TrueCoin Pay $700K to Settle SEC Claims of Investor Fraud\" width=\"825\" height=\"300\" srcset=\"https:\/\/crypto-economy.com\/\/wp-content\/uploads\/2024\/09\/TrustTokenAndTrustCoinSettlement.jpg 825w, https:\/\/crypto-economy.com\/\/wp-content\/uploads\/2024\/09\/TrustTokenAndTrustCoinSettlement-300x109.jpg 300w, https:\/\/crypto-economy.com\/\/wp-content\/uploads\/2024\/09\/TrustTokenAndTrustCoinSettlement-768x279.jpg 768w\" sizes=\"(max-width: 825px) 100vw, 825px\" \/><\/p>\n<h2 style=\"text-align: left\"><span data-preserver-spaces=\"true\">TrustToken and TrueCoin Settlement Details<\/span><\/h2>\n<p style=\"text-align: justify\"><strong><span data-preserver-spaces=\"true\">TrueCoin and TrustToken have reached a settlement<\/span><\/strong><span data-preserver-spaces=\"true\"> regarding the SEC&#8217;s charges, <\/span><strong><span data-preserver-spaces=\"true\">neither admitting nor denying the allegations<\/span><\/strong><span data-preserver-spaces=\"true\">. Both companies will incur civil penalties of $163,766 each. <\/span><\/p>\n<p style=\"text-align: justify\"><span data-preserver-spaces=\"true\">Additionally, TrueCoin will pay a disgorgement of $340,930 along with prejudgment interest amounting to $31,538. The settlements are <\/span><span data-preserver-spaces=\"true\">subject to<\/span><span data-preserver-spaces=\"true\"> court approval and include final judgments enjoining the companies from violating applicable federal securities laws.<\/span><\/p>\n<h2 style=\"text-align: left\"><span data-preserver-spaces=\"true\">SEC\u2019s Stance on Registration<\/span><\/h2>\n<p style=\"text-align: justify\"><span data-preserver-spaces=\"true\">Jorge G. Tenreiro, Acting Chief of the SEC\u2019s Crypto Assets &amp; Cyber Unit, emphasized the importance of registration in protecting investors. <\/span><\/p>\n<blockquote>\n<p style=\"text-align: center\"><span data-preserver-spaces=\"true\">\u201cTrueCoin and TrustToken sought profits for themselves by exposing investors to substantial, undisclosed risks through misrepresentations about the safety of the investment,\u201d Tenreiro stated. <\/span><\/p>\n<\/blockquote>\n<p style=\"text-align: justify\"><span data-preserver-spaces=\"true\">He added that this case exemplifies why registration matters, as it ensures investors have access to key information needed to make fully informed decisions. The settlement marks a significant development in the SEC\u2019s ongoing efforts to regulate the <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/crypto-economy.com\/virtual-currencies\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">cryptocurrency<\/span><\/a><span data-preserver-spaces=\"true\"> market and protect investors from fraudulent activities.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>TL;DR Fraudulent Claims: TrustToken and TrueCoin falsely marketed TrueUSD (TUSD) as fully backed by U.S.\u00a0dollars while investing in a risky offshore fund. SEC Settlement: Both companies agreed to pay $163,766 each in civil penalties, with TrueCoin also paying $340,930 in disgorgement and $31,538 in interest. Investor Protection: The SEC emphasized the importance of registration to &#8230; <\/p>\n<p class=\"read-more-container\"><a title=\"TrustToken and TrueCoin Pay $700K to Settle SEC Claims of Investor Fraud\" class=\"read-more button\" href=\"https:\/\/crypto-economy.com\/trusttoken-and-truecoin-pay-700k-to-settle-sec-claims-of-investor-fraud\/#more-172155\" aria-label=\"More on TrustToken and TrueCoin Pay $700K to Settle SEC Claims of Investor Fraud\">Read more<\/a><\/p>\n","protected":false},"author":32,"featured_media":172157,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[102,84,74],"tags":[5536,4816,5016,4986],"_links":{"self":[{"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/posts\/172155"}],"collection":[{"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/users\/32"}],"replies":[{"embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/comments?post=172155"}],"version-history":[{"count":2,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/posts\/172155\/revisions"}],"predecessor-version":[{"id":172159,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/posts\/172155\/revisions\/172159"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/media\/172157"}],"wp:attachment":[{"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/media?parent=172155"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/categories?post=172155"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/crypto-economy.com\/wp-json\/wp\/v2\/tags?post=172155"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}