The creator of a lending platform today agrees to pay more than $ 10.5 million to improve US security and exchange commission security that he has taken investor funds to buy millions of stablecoin terrausd before it crumbles.
Huynh Tran Quang Duy, also known as Duy Huynh, told customers of his firm Myconstant, that their money would go to a service that corresponds to the Crypto loan to yield 10%, SEC told a order on Tuesday.
The agency claimed that in reality, Huynh used $ 11.9 million of his customers’ money to buy terrausd (UST), a stablecoin tied to Terra Blockchain It collapsed in mid-2022 and wiped billions of dollars.
MyConstant is one of many crypto-associated businesses affected by Terra’s collapse, which is estimated to flush half a trillion dollar from the crypto market.
The company has faced regulatory action since late 2022, when the California finance regulator accused it violation of state security laws And it has been ordered the operations, but it will appear that the first time myconstant customers can see the return.
Huynh to pay millions to myconstant customers
The SEC said Huynh, a citizen of Vietnam and the US, said it would pay a disgorgement of more than $ 8.3 million with the prejudgment interest of $ 1.5 million to pay myconstant customers.
He must also pay a civil penalty of $ 750,000 in 14 days, and does not admit or deny the findings of the SEC.
MyConstant lost nearly $ 8 million in Terra Bet, says Sec
According to the SEC, MyConstant began in 2018 and claimed to offer returns between 6% to 10% through the pool and lending customer funds, all of which were supported by crypto.
It announced the investment as “low risk” and between September 2020 and November 2022, myconstant raised more than $ 20 million from more than 4,000 investors, the agency said.
Huynh accused the $ 11.9 million purchase of terrausd and accidentally approximately $ 415,000 of investor funds for his personal use, but then lost more than $ 7.9 million in his terrausd to buy when the price of the token quickly and significantly refused on May 2022.
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The SEC claimed that Huynh demanded that the safety investors “incorrectly ensure the safety of their funds and to indicate them to re -invest in MyConstant,” and email summaries showing fake firm -made loans.
MyConstant stopped operations in mid-November 2022, citing the collapse of many crypto companies that year and since the return of $ 1.8 million to investors, along with the placement of all the company’s assets to a trust for investors.
Terra offered a huge harvest for stablecoin
The SEC did not detail how Huynh used his terrausd holders, but at the time of the alleged procedure, the Terra Blockchain offered up to 20% annual return to UST through the lending service to the anchor protocol.
Terra eventually collapsed because of a crypto market lull and users who take money from the blockchain ecosystem.
Terrausd was tied to the blockchain token, Terra (Luna), by an algorithm meant to keep its value at $ 1, but Luna’s price collapse caused Stablecoin to go, which then caused a spiral of death for both tokens.
Terra co-founder Kay kwon is waiting for the US test on many blockchain -related fraud charges.
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