SEC classifies TUSD as a security

So, the SEC just dropped some news that TrueCoin LLC and TrustToken Inc. got hit with settled charges for selling investment contracts related to TrueUSD (TUSD) without proper registration. This is supposed to be a stablecoin, but it looks like they weren’t playing by the rules. According to the SEC’s complaint, which was filed in a U.S. court in Northern California, TrueCoin was behind TUSD while TrustToken ran TrueFi, a lending protocol. The SEC claims that from November 2020 to April 2023, these companies sold investment contracts involving TUSD as well as profit-making chances tied to TrueUSD on TrueFi, all without proper registration. What’s even worse? They were marketing TUSD as a safe investment since they said it was fully backed by U.S. dollars. Turns out, a big chunk of what was supposedly backing TUSD was actually tossed into a risky, speculative offshore investment fund to chase higher returns for themselves. Things took a darker turn by around March 2022, after TUSD operations were sold off, and they had supposedly pumped over half a billion dollars of TUSD's backing into this sketchy fund. Then, by Fall 2022, they knew there were issues with redemptions at that fund but still kept lying to investors, promoting TUSD as being safe and backed.