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SEC Charges TrustToken and TrueCoin with Securities Violations in TUSD Stablecoin Case
Allegations of Misleading Investors
SEC Accuses TrustToken and TrueCoin of Offering Unregistered Securities
The U.S. Securities and Exchange Commission (SEC) has brought charges against TrustToken and TrueCoin for their involvement in the TrueUSD (TUSD) stablecoin, alleging that the companies misrepresented TUSD and TrueFi as “safe and trustworthy” investments between November 2020 and April 2023.
Enforcement of Investor Protection
SEC’s Stance on Market Participants’ Registration
Jorge G. Tenreiro, the acting Chief of the Commission’s Crypto Assets and Cyber Unit, stressed the importance of enforcing registration for market participants to protect investors. The SEC aims to ensure that the cryptocurrency industry operates within legal boundaries.
Settlement Reached
TrustToken and TrueCoin Agree to Settlement
TrustToken and TrueCoin, facing the SEC’s charges, have not admitted or disputed the allegations but have expressed willingness to settle. The companies will pay fines totaling $163,766, with an additional disgorgement amount of $340,930 for TrueCoin.
SEC’s Regulatory Actions in the Crypto Sector
Increasing Number of Settlements and Penalties
The SEC has registered numerous settlements with cryptocurrency firms, totaling over seven billion dollars in fines over the past 12 years. Recent reports indicate a significant increase in penalties within the crypto sector, raising concerns about regulatory approaches.
Controversy Over SEC’s Regulatory Practices
Debate Surrounding SEC’s Approach to Crypto Regulation
The SEC’s enforcement-focused approach to regulating the crypto industry has sparked controversy, with stakeholders questioning the effectiveness of “regulation by enforcement.” The strained relationship between regulators and digital asset firms is becoming increasingly apparent.
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