Huynh Tran Quang Duy, the individual behind the now-defunct lending platform, MyConstant, has reached an agreement with the U.S. SEC to resolve charges.
According to the official
SEC order dated August 5th
, Duy Huynh is accused of mismanaging investor funds. Allegedly, he used these funds, which were intended for a supposedly safe lending initiative, to purchase the stablecoin TerraUSD.
Between the years 2020 and 2022, MyConstant reportedly accumulated over $20 million from more than 4,000 investors. The platform advertised potential returns of up to 10%, characterizing the investment as having minimal risk.
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However, the SEC alleges that Huynh diverted $11.9 million of these funds into TerraUSD, a cryptocurrency that suffered a near-total collapse in value during May of 2022. This action resulted in estimated losses of around $7.9 million for investors.
Beyond the TerraUSD investment, Huynh is also accused of using $415,000 from customer accounts for his own personal spending. Following these losses, the SEC contends that he attempted to placate investors by disseminating misleading updates that included fabricated loan figures.
To resolve the accusations, Huynh has consented to return over $8.3 million, plus an additional $1.5 million in interest. He is also required to pay a civil penalty of $750,000 within a two-week timeframe.
The settlement dictates that Huynh will neither acknowledge nor dispute the SEC’s determinations.
In related news, recent introductions of lending features by Upbit
$852.45M
have triggered legal and security concerns among regulatory bodies in South Korea. Want to know the full details?
Read the full story here.