Huynh Tran Quang Duy, the founder of MyConstant, has come to an agreement with the Securities and Exchange Commission to pay over $10.5 million to settle the claims of using investors’ funds to buy TerraUSD before it collapsed in May 2022.
According to the SEC order, MyConstant was a crypto lending platform founded in 2018, which promised its investors 6% to 10% returns on their investments. It is worth noting that the platform portrayed itself as a lending service provider and has promised its investors that their funds will be used for loan purposes.
Despite using the funds for the promised purpose, the company and its creator have used the collected amount of $11.9 million to buy TerraUSD, an algorithmic stablecoin that failed in 2022 and resulted in losses in billions of dollars.
Additionally, the SEC complaint notes that Huynh used the investors’ funds to support his personal luxury. He allegedly misled the investors by promising them low-risk returns through a loan matching service.
However, he used the funds for buying TerraUSD and further presented the false summaries showing fake loans to reassure investors; yet the MyConstant has seized its operations in November 2022 and has returned around $1.8 million to the investors.
MyConstant was also violating state securities laws
Post identification of its involvement in such practice, it was also reported by the finance regulators of California that MyConstant violated state securities laws. The allegation of betting came following Huynh’s alleged use of investors’ funds to buy UST, betting on its high yield via the Anchor Protocol.
After the sudden collapse of TerraUSD, over a billion dollars went out of the crypto market, and has forced over one dozen companies and corporations to file for bankruptcy. In the same year, the FTX event occurred, which also resulted in losses greater than the losses caused by TerraUSD and Terra LUNA.
The creator of MyConstant, Huynh, holds a dual citizenship status, one of Vietnam and the other of the United States. He agreed to pay $8.3 million in disgorgement with prejudgment interest of $1.5 million to pay back the customers left empty-handed.
It is important to note that from 2020 to 2023, the wider crypto market has seen the most number of frauds and scam events, including high-profile cases linked to known crypto moguls; yet in this period, the U.S SEC was chaired by Gary Gensler.
A quick overview of the crypto market
According to the data from CoinMarketCap, the crypto market capitalization is $3.73 trillion, with the trading volume at $143.02 billion, and the crypto fear and greed index was at 52, indicating neutrality in wider market sentiment.
Bitcoin is priced at $114,193, and since the last 78 hours, it seems to be tumbling in the range between $112,701- $115,093. Its market capitalization is $2.27 trillion, and trading volume has reached $59.31 billion with an increase of 5.88%.
In the past 24 hours, the gainers are Pump token, followed by POL, Mantle, Pendle, IOTA, NEAR Protocol, Aptos, and VeChain; however, the losers are Bonk, Sonic, Toncoin, Flare, Conflux, Pi, and Gate token.
Execution-first marketing. Own every Web3 feed with Koinpr.com.
