SEC Takes Action Against Tai Mo Shan Limited Over Alleged Misleading Practices in Terra USD Market

The U.S. Securities and Exchange Commission (SEC) has accused Tai Mo Shan Limited, a subsidiary of Jump Crypto Holdings LLC, of misleading investors regarding Terra USD stability and selling unregistered securities.

According to the allegations, Tai Mo Shan assured investors that Terraform Labs’ algorithm ensured the stability of Terra USD, when in reality, external interventions were necessary to maintain the token’s value. This deceptive behavior has led the SEC to label the actions as “misleading”.

Furthermore, the company allegedly acquired LUNA tokens from Terraform Labs between January 2021 and May 2022 and then resold them on U.S.-based exchanges without registering these offerings with the regulatory body. The SEC views this activity as a breach of securities laws.

As a result of these alleged actions, Tai Mo Shan has agreed to pay over $123 million in fines, prejudgment interest, and civil penalties. Additionally, the company has been issued a cease-and-desist order. It is important to note that the company did not admit to the charges but rather chose to settle the matter.

The Terra collapse has served as a wake-up call for the crypto industry, highlighting the importance of transparency and trust within these systems. As the SEC moves forward under new leadership, it appears that tightening regulatory oversight will be a key priority.

Source: coinpedia.org