Foresight News reports that Tai Mo Shan Ltd., the cryptocurrency division of Jump Trading, has agreed to pay $123 million to settle charges by U.S. regulators for misleading investors about the stability of its TerraUSD algorithmic stablecoin. The U.S. Securities and Exchange Commission stated in a release on Friday that the company also resolved allegations of violating securities laws when underwriting its sister token, Luna. Tai Mo Shan did not admit or deny the agency's claims when agreeing to the settlement.
TerraUSD was supposed to maintain a constant value of $1 through a complex algorithm involving Luna and trader incentives. The U.S. Securities and Exchange Commission stated that, in reality, Tai Mo Shan's large purchases helped stabilize the coin, deceiving the market into believing that the algorithmic mechanism was working.
