The US Securities and Exchange Commission (SEC) has announced that it has reached a settlement with TrustToken and TrueCoin, which were accused of misleading investors.

Two companies will pay a total of $163,000 in fines due to false statements made to investors regarding the stablecoin TrueUSD (TUSD). Additionally, TrueCoin will refund unjust gains in the amount of $340,000. The companies neither accepted nor denied the findings of the SEC.

In the SEC's press release, the complaint alleges that until March 2022, TUSD operations were sold to an offshore entity, and that entity, along with TrueCoin, invested over half a billion dollars of assets claimed to back TUSD into a speculative fund.

When the Fall of 2022 arrived, TrueCoin and TrustToken continued to misinform investors that TUSD was backed one-to-one with the US dollar, despite realizing repayment issues related to this fund.

The complaint alleges that as of September 2024, 99% of the reserves supporting TUSD are invested in speculative funds. In addition, the SEC stated that TUSD is being offered as a promising investment vehicle and satisfies the 'common enterprise' criterion under the Howey test. This strengthens the claim that TUSD falls within the SEC's definition of a security.

The stability of TUSD was questioned earlier this year when the stablecoin fell below 1 dollar. TUSD claimed to be the first dollar-backed stablecoin with "live on-chain audits." Data scientist Carlos Mercado from Flipside Crypto said, "I don't know how TrueUSD's structure is, but the clear dependence on off-chain liquidity has shaken people's confidence in the token. If sufficient reserves are provided, it may reach 1 dollar again in the long term with a lower market value."