Terra·Luna Scam Involvement JumpCrypto Agrees to $180 Million Fine with US SEC

Jump Crypto, which was under investigation by the U.S. Securities and Exchange Commission (SEC) for misleading investors by claiming that the cryptocurrency 'Terra·Luna' was safe, has reached a settlement with the SEC on the condition of paying approximately $123 million (about 180.3 billion KRW) in fines and other penalties.

On the 25th (local time), The Wall Street Journal (WSJ) reported that the SEC and Tai Mo Shan, a wholly owned subsidiary of Jump Crypto Holdings, agreed to this measure and to close the case.

According to a recent press release by the SEC, the amount Tai Mo Shan must pay includes $73.45 million in disgorgement, $12.92 million in pre-judgment interest, and $36.73 million in penalties.

SEC Chairman Gary Gensler stated in a press release, "There have been too many cases of large-scale investor losses due to fraud in the cryptocurrency market," adding, "Participants in the cryptocurrency market must comply with applicable securities laws and must not deceive the public." Chairman Gensler is scheduled to step down in January next year, and President-elect Donald Trump has nominated Paul Atkins, a pro-cryptocurrency former SEC commissioner, as his successor.

Jump Crypto said, "While we are deeply frustrated by the SEC’s unprecedented 'law enforcement regulation' approach toward the digital asset industry, we are nevertheless pleased to resolve this matter."

In May 2021, when Terra’s value fell below a certain threshold, Tai Mo Shan purchased $20 million worth to support the price. At that time, Do Kwon, the main culprit of the Terra·Luna incident, and his cryptocurrency company Terraform Labs did not disclose the involvement of Tai Mo Shan or Jump Crypto, instead claiming it was "evidence that Terra had the ability to recover its value independently." Jump Crypto profited about $1 billion by selling Luna. Later, in May 2022, Luna’s price plummeted by over 99% within days, resulting in a loss of approximately $40 billion in market capitalization.

The WSJ reported that following President-elect Trump’s victory, prices of cryptocurrencies such as Bitcoin have risen again, attracting investors back to the cryptocurrency market. It also pointed out that a significant portion of cryptocurrency profits goes to trading firms rather than ordinary investors.