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The Securities and Exchange Commission (SEC) has taken decisive action against Jump subsidiary Tai Mo Shan Limited, issuing a cease-and-desist order due to alleged violations of securities laws. The company is accused of engaging in unregistered securities trading and market manipulation.
According to the SEC’s investigation, Tai Mo Shan acted as a statutory underwriter for Terraform Labs’ crypto assets without proper registration. This egregious breach led to the firm profiting significantly from transactions on US-based platforms between January 2021 and May 2022.
Furthermore, the SEC alleges that Tai Mo Shan engaged in deceptive conduct during the de-pegging of UST’s price in May 2021. The company is accused of entering into an agreement with Terraform Labs to support UST’s price by purchasing over $20 million of UST, creating a false impression that Terraform’s algorithm was effectively stabilizing its price.
The SEC claims that Tai Mo Shan should have known that this conduct misled the market about the stability of UST’s peg and the effectiveness of Terraform’s algorithm. As a result, Tai Mo Shan has been ordered to pay $73.5 million in disgorgement, $12.9 million in interest, and a $36.7 million civil penalty.
These penalties will be distributed to harmed investors. This case serves as a stark reminder of the need for increased oversight in crypto markets.
Source: fullycrypto.com
