Key Takeaways
- MyConstant founder Duy Huynh was accused of misusing investor funds to buy UST.
- When the stablecoin collapsed in May 2022, around $7.9 million of MyConstant investors’ funds were lost
- Huynh has agreed to pay over $10.5 million to settle an SEC lawsuit.
MyConstant founder Duy Huynh has settled a lawsuit with the U.S. Securities and Exchange Commission (SEC) for over $10.5 million.
The SEC alleges that Huynh misled MyConstant investors, including by falsely marketing TerraUSD (UST) as a low-risk investment.
Top Trending Crypto Articles
MyConstant and the UST Collapse
MyConstant was pitched as a crypto?backed lending platform that promised investors 6–10% returns, claiming loans were low-risk and crypto?collateralized.
Huynh claimed that for each loan that MyConstant made to a borrower, MyConstant would secure crypto assets worth at least 150% of the value of the loan as collateral.
“Lending is backed by cryptocurrencies that are easy to sell if borrowers default,” the platform’s Terms of Service stated.
In reality, however, MyConstant misused customer funds to buy UST, wiping out around $7.9 million of investors’ funds when the stablecoin collapsed in May 2022.
According to the SEC, Huynh also misappropriated approximately $415,000 for his personal use.
Legal Consequences
Following the SEC charges, Huynh reached a settlement with the agency, agreeing to pay an $8.3 million disgorgement to return investor funds plus $1.5 million in interest and a $750,000 civil penalty.
The total settlement exceeded $10.5 million. No admission of wrongdoing by the Huynh was required.
Terra Casualties
While MyConstant investors have finally received some good news in the form of Huynh’s restitution payment, the platform is just one of many casualties from the collapse of UST and its sister token LUNA.
| Entity | Losses | Exposure | Outcome |
|---|---|---|---|
| MyConstant | ~$7.9 million | Investor funds used to buy UST | Repayment ongoing |
| Anchor Protocol | ~$14 billion TVL lost | Depositors in UST-based yield | TVL to near zero |
| Luna Foundation Guard | ~$3 billion BTC spent to defend peg | BTC reserves sold off during UST depeg | Failed to restore UST peg |
| Three Arrows Capital | ~$500 million | UST & LUNA investments | Insolvency |
| Delphi Digital | ~$10 million | Treasury lost on LUNA | Later admitted losses and lessons |
Top Trending Crypto Articles
Was this Article helpful?
#Crypto #CEO #Fined #10M #Misusing #Investor #Funds #Collapsed #TerraUSD