Bitget App
Trade smarter
Buy cryptoMarketsTradeFuturesEarnWeb3SquareMore
Trade
Spot
Buy and sell crypto with ease
Margin
Amplify your capital and maximize fund efficiency
Onchain
Going Onchain, without going Onchain!
Convert & block trade
Convert crypto with one click and zero fees
Explore
Launchhub
Gain the edge early and start winning
Copy
Copy elite trader with one click
Bots
Simple, fast, and reliable AI trading bot
Trade
USDT-M Futures
Futures settled in USDT
USDC-M Futures
Futures settled in USDC
Coin-M Futures
Futures settled in cryptocurrencies
Explore
Futures guide
A beginner-to-advanced journey in futures trading
Futures promotions
Generous rewards await
Overview
A variety of products to grow your assets
Simple Earn
Deposit and withdraw anytime to earn flexible returns with zero risk
On-chain Earn
Earn profits daily without risking principal
Structured Earn
Robust financial innovation to navigate market swings
VIP and Wealth Management
Premium services for smart wealth management
Loans
Flexible borrowing with high fund security
Tai Mo Shan settles with SEC for $123M over TerraUSD collapse

Tai Mo Shan settles with SEC for $123M over TerraUSD collapse

GrafaGrafa2024/12/23 12:30
By:Mahathir Bayena

Tai Mo Shan, a subsidiary of Jump Crypto, has reached a settlement with the U.S. Securities and Exchange Commission (SEC) for $123 million on December 20.

The settlement follows allegations that Tai Mo Shan misled investors about the stability of the TerraUSD (CRYPTO:UST) algorithmic stablecoin prior to its collapse.

The SEC claimed that in 2021, Tai Mo Shan entered an agreement with Terraform Labs to buy Terra LUNA at a discounted rate.

As part of this deal, Tai Mo Shan purchased approximately $20 million worth of UST to help maintain its 1:1 peg to the U.S. dollar.

"The impact reverberated throughout the crypto markets, eventually costing the savings of countless investors," commented SEC Chair Gary Gensler on the incident.

He emphasised that all crypto market participants must comply with securities laws and not deceive the public.

The collapse of UST in May 2022 had a profound effect on the cryptocurrency market, contributing to tighter regulations on stablecoins.

The Lummis-Gillibrand Stablecoin Act of 2024, for example, prohibits the use of algorithmic stablecoins.

The downfall of TerraUSD began when a whale dumped approximately $285 million in UST, causing it to lose its peg to the dollar and triggering a series of market crashes.

UST’s failure triggered a cascade of liquidations and panic-selling, ultimately leading to the complete collapse of the stablecoin's value.

The fallout prompted investigations into Terraform Labs and its founder, Do Kwon, resulting in various legal charges, including a $4.4 billion settlement.

At the time of reporting, the TerraUSD (UST) price was $0.01832.

0

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

PoolX: Earn new token airdrops
Lock your assets and earn 10%+ APR
Lock now!

You may also like