The creator of the now-defunct lending platform has agreed to pay more than $10.5 million to settle a SEC claim that he rode investor funds to buy a multimillion-dollar Stablecoin Terrausd before it went bankrupt.
Huynh Tran Quang Duy, also known as Duy Huynh, told his company MyConstant customers that their money will become a Crypto-backed loan matching service that will generate 10% Order Tuesday.
The agency claims that in fact, Huynh used $11.9 million in customer funds to buy Terrausd (UST), which is with Terrausd (UST) Terra Blockchain This collapsed in mid-2022 and consumed billions of dollars.
MyConstant is one of several cryptocurrency companies affected by the Terra crash, which is estimated to have rushed half a trillion dollars from the cryptocurrency market.
The company has faced regulatory action since the end of 2022, when California’s financial regulator accused it Violation of state securities laws And ordered it to stop operating, but this seems to be the first time my client has seen a return to its original state.
huynh pays MyScontant customers millions of dollars
Huynh, a citizen of Vietnam and the United States, agreed to pay more than $8.3 million in currency, while also paying $1.5 million in previous interest to repay MyConstant customers, the SEC said.
He also had to pay a civil fine of $750,000 within 14 days and did not acknowledge or deny the SEC’s findings.
SEC says
MyConstant started in 2018 and claims to provide 6% to 10% return through collection and loan client funds, all supported by Crypto.
The agency said its investments were “low risk” and between September 2020 and November 2022, MyConstant raised more than $20 million from more than 4,000 investors.
Huynh allegedly spent $11.9 million on Terrausd and misappropriated approximately $415,000 in investor funds for personal use, but then lost more than $7.9 million on his Terrausd when the token price quickly and rapidly declined in May 2022.
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The SEC claims Huynh then attempted to “errorize investors with the security of their funds and inspire them to reinvest MyConstant” and sent a summary via email showing fake loans offered by the company.
MyConstant ceased operations in mid-November 2022, citing the collapse of several crypto companies that year, and has since returned $1.8 million to investors while placing all the company’s assets in investors’ trust funds.
Terra provides great benefits for Stablecoin
The SEC did not elaborate on how Huynh allegedly used his Terrausd Holdings, but at the so-called plan, the Terra blockchain provided the UST’s 20% annual return through a lending service anchoring protocol.
Terra eventually collapsed due to the slump of the cryptocurrency market and users drawing money from the blockchain ecosystem.
Terrausd uses an algorithm to keep its value at $1 to tie it to the blockchain’s token Terra (Luna), but Luna’s downward price has caused DePeg to Stablecoin, which has caused the death spiral of two tokens.
Co-founder of Terra Right to arrive The United States is awaiting trial of several fraud charges related to blockchain.
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