Tai Mo Shan Ltd., a subsidiary of Jump Crypto, has reached a $123 million settlement with the U.S. Securities and Exchange Commission (SEC) regarding its involvement in the collapse of stablecoin TerraUSD (UST).
This settlement is part of the SEC’s broader efforts to regulate the cryptocurrency market and hold market participants accountable for fraudulent practices. The SEC accused Tai Mo Shan of misleading investors by artificially stabilizing the value of UST during its failed attempt to maintain a $1 peg.
The comparison includes three main components:
- Disgorgement: $73.5 million
- Prejudice interest: $12.9 million
- Civil penalty: $36.7 million
Although Tai Mo Shan has neither admitted nor denied the SEC’s findings, the Company has agreed to cease and desist from further violations of U.S. securities laws.
SEC alleges Tai Mo Shan manipulated UST during the critical breakdown period
The SEC’s allegations against Tai Mo Shan stem from its actions between 2021 and 2022, in which the company allegedly sold over $20 million worth of UST during critical periods when the stablecoin’s value fell below $1 bought. This was done to create the false impression that UST’s algorithmic stabilization mechanism was working properly. The SEC also alleges that Tai Mo Shan subscribed and sold Luna tokens, UST’s sister token, on U.S. crypto platforms during this period, in further violation of securities laws.
Tai Mo Shan settles with SEC for $123 million over TerraUSD. Source: SEC
The TerraUSD collapse in May 2022 was one of the most significant events in cryptocurrency history and resulted in the loss of almost $40 billion in investor holdings. The UST’s failure to…
