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.