SEC charges Jump Crypto subsidiary $123 million for manipulating Terra Luna UST peg
The SEC has charged Tai Mo Shan Limited, a subsidiary of Jump Crypto, for misleading investors regarding Terra USD (UST) after it lost its $1 peg. The SEC alleges Tai Mo Shan engaged in trading that falsely suggested UST's price was maintained solely by its algorithm. In May 2021, after UST lost its peg, Tai Mo Shan purchased over $20 million of UST, implying that a technical mechanism supported its price, while the SEC claims external support was crucial. Tai Mo Shan is also accused of distributing LUNA as unregistered securities in the U.S. The firm agreed to pay $123 million in penalties without admitting or denying the findings. The Terra ecosystem has faced scrutiny since its 2022 collapse, with Terraform Labs filing for Chapter 11 bankruptcy in January 2024. Legal challenges continue for Terraform and co-founder Do Kwon, who faces potential extradition following a conviction in Montenegro. Regulators are investigating other tokens linked to Terraform for securities classification.
