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The U.S. Securities and Exchange Commission has charged two cryptocurrency firms linked to the TUSD stablecoin with securities violations
TrueCoin and TrustToken established charges filed by the SEC, alleging unregistered offers and sales of 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 Sept. 24 complaint, the SEC stated that both companies used deceptive marketing tactics to promote TUSD and TrueFi as “safe and trustworthy” investment vehicles. Jorge G. Tenreiro, acting chief of the SEC’s crypto and Cyber Assets Unit, emphasized that the case highlighted why company registration is critical for investor protection.
Cryptocurrency market participants, including former SEC staff like Dan Gallagher, now chief counsel at Robinhood Markets, have often challenged this rhetoric adopted by SEC officials.
Due to this conflict, there have been ongoing legal battles, involving companies like Coinbase. Lawmakers have also petitioned the securities agency over its “regulation by enforcement” approach, with SEC Commissioner Hester Peirce calling the regulator’s strategy inefficient and confusing.
Without admitting or denying the charges, TrueCoin and TrustToken agreed to pay fines of $163,766. TrueCoin was also fined an additional $340,930.
The settlement adds to a growing list of fines levied by the SEC against the cryptocurrency industry. Since 2013, cryptocurrency companies have paid the agency more than $7 billion, and one study found that cryptocurrency fines have increased by more than 3,000% in the past 12 months.
