Jump Crypto’s subsidiary, Tai Mo Shan, has reached a settlement of $123 million with the U.S. Securities and Exchange Commission (SEC) for its involvement in the stabilization of the TerraUSD (UST) stablecoin in 2021.
The SEC accused Tai Mo Shan of misleading investors by purchasing $20 million worth of UST to maintain its dollar peg during a period of instability, creating a false impression of the coin’s stability.
The settlement, announced on December 20, 2024, follows an investigation into actions that the SEC alleges misrepresented the stability of the coin.
In May 2021, the value of TerraUSD dropped, causing concerns about its stability. Tai Mo Shan, which operates as part of Jump Crypto, intervened by buying a significant amount of UST, temporarily stabilizing the coin.
However, the SEC’s investigation revealed that this intervention misled investors into believing that Terraform Labs’ algorithmic stabilization mechanism was functioning properly.
