BlockBeats news, on September 27, Bloomberg reported that a considerable portion of TrueUSD’s reserves were invested in high-risk offshore funds, which triggered charges from the U.S. Securities and Exchange Commission (SEC) against TrueCoin LLC and TrustToken Inc. The SEC believes these companies’ statements that the TrueUSD stablecoin is fully backed by U.S. dollars or its equivalent are false. The accusation highlights transparency and trust issues in the cryptocurrency space, especially when it comes to complex ownership structures and reserve management.
Previously, TrueUSD’s reserves were transferred to a bank in the Bahamas and its ownership was transferred to an offshore entity called Techteryx Ltd. Such operations are not uncommon in the cryptocurrency space, but many have not questioned these changes due to the industry’s belief in decentralization and trustless systems. However, if the SEC’s accusations are true, this will be a typical case of fraud that is not limited to the cryptocurrency field, but poses a challenge to the entire financial regulatory system.
