Jump Crypto's subsidiary, Tai Mo Shan, will pay $123 million to settle with the SEC over misleading TerraUSD (UST) investors. The SEC claimed Tai Mo Shan's actions during the UST depegging falsely signaled market stability. Despite attempting to stabilize UST by purchasing over $20 million, the efforts failed, resulting in significant investor losses.
Moreover, Tai Mo Shan was charged as a statutory underwriter for Terra Luna tokens, conducting unregistered transactions on US platforms. SEC Chair Gary Gensler emphasized compliance with securities laws to protect investors. Tai Mo Shan will pay civil penalties, disgorgement, and prejudgment interest without admitting or denying allegations.
Following this settlement, Terraform and its founder Do Kwon agreed to a hefty $4.5 billion payment to settle similar charges. In early 2024, Terraform Labs declared bankruptcy, transferring control of Terra blockchain to the community, and ending several services.
