Tai Mo Shan, a subsidiary of Jump Crypto, has agreed to pay $123 million to the SEC for misleading investors about the stability of TerraUSD (UST) before its collapse in May 2022. The settlement, announced on Dec. 20, stems from allegations that Tai Mo Shan collaborated with Terraform Labs to artificially maintain UST’s 1:1 peg to the US dollar by purchasing $20 million in UST at a steep discount.
SEC Chair Gary Gensler commented on the broader consequences of the collapse, which cost many investors their savings:
“Crypto participants must comply with securities laws and avoid deceiving the public.”
The TerraUSD fallout led to significant regulatory changes, including the Lummis-Gillibrand Stablecoin Act of 2024, which prohibits algorithmic stablecoins.
Source: Cointelegraph
