According to Foresight News, Tai Mo Shan Ltd., a subsidiary of Jump Trading, agreed to pay $123 million to settle allegations from U.S. regulators that it misled investors regarding the stability of the TerraUSD algorithmic stablecoin.
The U.S. Securities and Exchange Commission stated that the company has also resolved allegations of violating securities laws when underwriting the TerraUSD sister token Luna. Tai Mo Shan did not admit or deny the allegations in the settlement.
TerraUSD was supposed to maintain a value of $1 through Luna's algorithm and incentive mechanisms. The SEC stated that Tai Mo Shan's significant purchases stabilized the coin, misleading the market into believing the algorithm was effective.