Approval of the settlement offer between Tai Mo Shan and the SEC. Source: Securities and Exchange Commission
Jump Crypto's subsidiary, Tai Mo Shan, has agreed to a $123 million settlement with the SEC for allegedly misleading investors about the stability of the now-infamous TerraUSD (UST) algorithmic stablecoin.
The SEC revealed that Tai Mo Shan manipulated UST's price stability by purchasing $20 million in UST to falsely maintain its 1:1 peg with the US dollar. This deceptive action masked the inherent instability of the stablecoin, misleading countless investors.
TerraUSD’s catastrophic downfall began in May 2022 when a whale offloaded $285 million in UST, causing it to de-peg to $0.98. Panic spread, and within days, UST plummeted to $0.67, sparking a chain reaction of liquidations and ultimately the collapse of the entire Terra ecosystem.
This settlement highlights the growing scrutiny of crypto projects and the consequences of misleading investors. It’s a stark reminder to always conduct thorough research and remain cautious in volatile markets.
Stay informed. Protect your investments.
