The U.S. Securities and Exchange Commission said it reached a settlement with TrueCoin LLC and TrustToken Inc., following charges involving the sale of stablecoin TrueUSD. 

TrueCoin was an issuer of TrueUSD (TUSD), and TrustToken was the developer of TrueFi, a lending protocol, the SEC noted.  Both TrueCoin and TrustToken did not admit or deny the agency's allegations and agreed to pay $163,766 in penalties each. TrueCoin also agreed to pay $340,930 in disgorgement, according to the SEC's statement released on Tuesday.

From November 2020 until April 2023, TrueCoin and TrustToken "engaged in the unregistered offer and sale of investment contracts in the form of the crypto asset TUSD and profit-making opportunities with respect to TrueUSD on TrueFi." The SEC said that the two also "falsely marketed the investment opportunity as safe and trustworthy" and fully backed by U.S. dollars or an asset equivalent to that when, instead, a large portion of the assets was invested in a "speculative and risky offshore investment fund to earn additional returns."

“TrueCoin and TrustToken sought profits for themselves by exposing investors to substantial, undisclosed risks through misrepresentations about the safety of the investment,” said Jorge G. Tenreiro, acting chief of the SEC’s Crypto Assets & Cyber Unit, in the statement. “This case is a prime example of why registration matters, as investors in these products continue to be deprived of the key information needed to make fully informed decisions.”

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