SEC: 99% of TrueUSD reserves are invested in a risky offshore fund. TrueCoin and TrustToken fined $1.04M for false claims regarding the backing of the $500M stablecoin 💸

The SEC has charged TrueCoin LLC and TrustToken Inc., creators of the TrueUSD (TUSD) stablecoin, for misleading investors by falsely claiming that TUSD was fully backed by U.S. dollars. Instead, nearly all TUSD reserves were invested in a risky offshore fund between 2020 and 2023. By March 2022, $500 million was tied to this fund, and by 2024, 99% of the reserves were in speculative investments. Despite redemption issues in late 2022, the companies continued to assure investors of TUSD’s security. Both companies have settled with the SEC, agreeing to pay penalties and face future restrictions. This case is part of the SEC’s increasing scrutiny of the crypto industry, with $4.68 billion in fines collected in 2024.