The United States Securities and Exchange Commission (SEC) announced Tuesday that it has charged TrueCoin LLC and TrustToken Inc.—a pair of companies behind the TrueUSD (TUSD) stablecoin—with fraudulent and unregistered sales of investment contracts.

The regulator called TrueUSD a “purported stablecoin,” and charged the firms with false marketing claims related to the safety and backing of the dollar-pegged crypto asset. The companies have settled the charges without admitting or denying the allegations, and will collectively pay approximately $700,000 in penalties in the agreement.

“TrueCoin and TrustToken sought profits for themselves by exposing investors to substantial, undisclosed risks through misrepresentations about the safety of the investment,” said Jorge G. Tenreiro, Acting Chief of the SEC’s Crypto Assets & Cyber Unit, in a release. “This case is a prime example of why registration matters, as investors in these products continue to be deprived of the key information needed to make fully informed decisions.”

Editor’s note: This story is breaking and will be updated with additional information.

The Moskowitz Law Firm filed another class-action lawsuit against a crypto firm Thursday, this time alleging that OpenSea’s customers were sold NFTs as unregistered securities.

The lawsuit brought in a Florida federal court claims that two residents of the Sunshine State sustained damages as a result purchasing NFTs on the platform, which served as a go-to place to purchase digital art and collectibles when the NFT market ran red-hot in 2021 and 2022.

“We have learned a great deal in our extensive crypto litigation,” Moskowitz Law Firm Managing Partner Adam Moskowitz told Decrypt in a statement. “With today’s ever-changing regulation, there should be a process to sell NFTs in a well-regulated environment.”

The Miami-based law firm is currently litigating against a wide range of crypto firms and their associates, including FTX and 11 celebrities who endorsed the collapsed crypto exchange. It has also sued basketball legend Shaquille O’Neal over his Solana-based NFT project Astrals, and soccer star Cristiano Ronaldo over his promotion of the crypto exchange Binance.

The latest lawsuit alleges that OpenSea engaged in a scheme “to mislead and deceive investors” while unjustly enriching itself by charging fees on NFT transactions. The Florida residents believed that NFTs traded on OpenSea were registered securities due to OpenSea’s representations, a copy of the case’s complaint shared with Decrypt states.

While the lawsuit does not list damages resulting from NFT purchases, it asserts that NFTs fall under the definition of a security as investment contracts. In various enforcement actions, the SEC itself has asserted similar claims, stating that NFT purchasers invested money in a common enterprise with the expectation of profit derived from the efforts of others.

Moskowitz’s lawsuit follows OpenSea’s disclosure of receiving a Wells notice in August, signaling that the Securities and Exchange Commission (SEC) is likely to sue the marketplace. On Twitter (aka X), OpenSea CEO Devin Finzer described the prospect of an enforcement action against OpenSea as a step into uncharted territory that puts artists at risk.

“The SEC [is] threatening to sue us because they believe NFTs on our platform are securities,” Finzer, a resident of Miami, said. “We should not regulate digital art in the same way we regulate collateralized debt obligations.”

As Finzer pointed out, NFTs can represent ownership in many things, including domain names, trading cards, and event tickets. Earlier this week, SEC Commissioners Hester Peirce and Mark Uyeda described the regulator’s approach to NFTs as “misguided and overreaching.”

Though the commissioners accused the SEC of an overzealous application of securities laws while targeting an NFT-gated restaurant chain, Moskowitz’s lawsuit argues that “the SEC’s stance on cryptocurrency has always been consistent.”

Last month, the law firm notched a partial win in its case against O’Neal, when a Florida judge ruled that the case could proceed on some accusations. In Thursday’s complaint, Moskowitz pointed to OpenSea as a platform where NFTs from O’Neal’s Astrals project were available.

OpenSea did not immediately respond to a request for comment from Decrypt.

Edited by Andrew Hayward

GameStop CEO Ryan Cohen agreed to pay a nearly $1 million civil penalty Wednesday to settle Federal Trade Commission (FTC) allegations that he unlawfully bought Wells Fargo securities.

The agency said that Cohen violated the Hart-Scott-Rodino Act, which requires investors to disclose purchasing large amounts of securities in a press release. Allegedly, Cohen did not disclose that he purchased more than 562,000 voting securities in the bank.

The disclosure would’ve given regulators the opportunity to review the deal for antitrust violations before it went through, the FTC said. Even though Cohen’s purchase of Wells Fargo securities was below the standard 10% threshold, it allegedly violated antitrust laws.

Cohen allegedly intended to influence Well Fargo’s business, the regulator said, advocating for a seat on the company’s board of directors in emails. At the same time, Cohen engaged in “periodic communications” with the bank’s leadership after he purchased the securities, suggesting steps that could be taken to improve the bank’s business, the FTC said.

Wells Fargo did not immediately respond to a request for comment from Decrypt. Cohen will pay $985,320, according to the FTC release.

Cohen joined GameStop’s board of directors in early 2021, and he was appointed chairman of the board six months after stepping into that role. Around a year ago, he was appointed CEO, taking over the reins of the video game retailer from Matt Furlong.

Meanwhile, GameStop’s share price has fallen 3% Wednesday to $19.55, adding on to a more than 13% decrease over the past month. Amid the online return of meme stock influencer Keith Gill, a.k.a. Roaring Kitty or DeepFuckingValue, GameStop’s stock price jumped to $48.75 in May.

Cohen, the founder and former CEO of the pet supplies company Chewy, said that GameStop’s leadership was “not here to make promises or hype things up” during a shareholder meeting in June. While the meeting was widely hyped amid the return of Roaring Kitty, it ultimately proved to be routine.

In the run-up, GameStop fans speculated that Gill could be appointed to the company’s board of directors. Yet the fabled meme stock influencer wasn’t even mentioned on the call.

Gill became the de facto face of a retail-led movement aiming to outsmart Wall Street short sellers in 2021. A meteoric rise in the company’s share price created a cult-like following toward the company, enshrining GameStop in internet culture as a widely popular meme stock.

GameStop’s shares have trended lower from their May peak as enthusiasm has cooled. The last time Gill flashed his positions in GameStop on Reddit was June 13, over three months ago.

A Twitter (aka X) post from Gill suggested that the influencer was interested in Chewy in June, with a subsequent SEC filing showing that he had purchased 9 million shares in the firm.

But that sentiment appeared to change when he posted a meme earlier this month that showed a character from the film “Toy Story 2” dropping a toy with a dog’s face superimposed on top. It was the same cartoonish dog image that Gill originally tweeted back in June.

The meme stock influencer’s online reappearance captivated the public’s interest earlier this year. A livestream that towed the line between performance art and financial advice amassed over 700,000 viewers, who were eager to hear Gill’s thoughts on GameStop.

During the live stream, Gill name-dropped Cohen, describing him as someone who could help the video game retailer modernize its business model away from selling gaming hardware.

“He seems to be taking the right approach, given this unique situation,” Gill said. “Let’s see where it goes from here.”

Edited by Andrew Hayward