Tai Mo Shan, a subsidiary of Jump Crypto, has reached a settlement with the U.S. Securities and Exchange Commission (SEC) for $123 million due to misleading investors about the stability of the TerraUSD (UST) algorithmic stablecoin prior to its collapse. The SEC stated that Tai Mo Shan had an agreement with Terraform Labs to purchase Terra LUNA at a discounted rate in 2021, subsequently buying approximately $20 million in UST to maintain its pegging to the US dollar. The collapse of UST in May 2022 triggered widespread turmoil in the crypto market, with SEC chairman Gary Gensler indicating that the actions of Tai Mo Shan had significant impacts on countless investors and highlighted the need for compliance with securities laws. Following the collapse, TerraUSD saw a drastic decline in its value as it lost its peg, significantly devaluing the underlying LUNA reserves, and leading to a comprehensive fallout that included legal ramifications for Terraform Labs and its founder, Do Kwon.

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