The U.S. Securities and Exchange Commission charged securities violations to two cryptocurrency organizations associated with the TUSD stablecoin.
TrueCoin and TrustToken settled the charges brought against them, which included allegations of unregistered offering and sales of investment contracts between November 2020 and April 2023.
Through the creation of the decentralized finance lending platform TrueFi, TrustToken enabled users to make use of TrueUSD, a stablecoin that TrueCoin had released.
The SEC claimed in a complaint dated September 24 that TUSD and TrueFi were promoted as “safe and trustworthy” investment vehicles through deceptive marketing strategies.
The SEC’s acting head of its Crypto Assets and Cyber Unit, Jorge G. Tenreiro, underlined that the case showed how important company registration is for protecting investors.
Participants in the cryptocurrency industry, like as Dan Gallagher, the top counsel of Robinhood Markets and a former SEC employee, have frequently disputed the rhetoric that SEC officials have been promoting.Â
As a result of this dispute, businesses like Coinbase are embroiled in continuous legal disputes. The Securities and Exchange Commission Commissioner Hester Peirce has criticized the agency’s “regulation by enforcement” method, calling it ineffective and unclear, in response to a petition from lawmakers.
TrueCoin and TrustToken consented to pay $163,766 in fines without acknowledging or disputing the allegations.
Additionally, TrueCoin was fined $340,930 in disgorgement. The settlement increases the total amount of SEC penalties imposed on the cryptocurrency sector.
According to a report, cryptocurrency fines have increased by more than 3,000% in the last 12 months, despite the fact that crypto firms have paid the agency over $7 billion since 2013.
