Jump Crypto’s wholly owned subsidiary, Tai Mo Shan, has agreed to a $123 million settlement with the U.S. Securities and Exchange Commission (SEC) for its role in misleading investors about the stability of its Terra USD (UST) stablecoin.
Jump Crypto, a subsidiary of Chicago-based private trading firm Jump Trading, has been an integral part of the Terra ecosystem. The company is currently under investigation by the U.S. Commodity Futures Trading Commission (CFTC).
Tai Mo Shan Tsui with SEC over misleading claims about TerraUSD
On December 20, SEC highlighted Tai Mo Shan’s deceptive practices during the UST decoupling crisis. The company attempted to stabilize UST by purchasing over $20 million worth of the stablecoin.
Luna Token. The agency confirmed that the company managed these assets as securities through unregistered transactions. Their strategy included planning to distribute these tokens on US trading platforms from January 2021 to May 2022.
SEC Chief Gary Gensler emphasized the broader impact of the incident, saying:
“[The UST decoupling effect] reverberated throughout the cryptocurrency markets, ultimately costing countless investors their savings. Regardless of the label, cryptocurrency market participants must comply with securities laws wherever possible and not deceive the public. Otherwise, investors will suffer.”
Do Kwon was found liable for fraud and unregistered securities offerings. They agreed to pay a whopping $4.5 billion to compensate harmed investors.
TerraVor Labs declared bankruptcy. The company subsequently transferred control of the Terra blockchain to the community and discontinued a number of its products and services.
