{"id":6900,"date":"2025-08-06T06:09:10","date_gmt":"2025-08-06T06:09:10","guid":{"rendered":"https:\/\/bitunikey.com\/news\/10m-sec-settlement-hits-myconstant-founder-over-terrausd-investment-and-misuse-of-funds\/"},"modified":"2025-08-06T06:09:23","modified_gmt":"2025-08-06T06:09:23","slug":"10m-sec-settlement-hits-myconstant-founder-over-terrausd-investment-and-misuse-of-funds","status":"publish","type":"post","link":"https:\/\/bitunikey.com\/news\/10m-sec-settlement-hits-myconstant-founder-over-terrausd-investment-and-misuse-of-funds\/","title":{"rendered":"$10m SEC settlement hits MyConstant founder over TerraUSD investment and misuse of funds"},"content":{"rendered":"<p><\/p>\n<div class=\"post-detail__content blocks\">\n<p class=\"is-style-lead\">The United States Securities and Exchange Commission has finalized a settlement with the founder of MyConstant, ordering him to pay over $10 million in penalties and restitution for misusing investor funds and making false claims about his platform\u2019s crypto lending services.<\/p>\n<div id=\"cn-block-summary-block_120e9dc9a3797d060dbac06bea162c6f\" class=\"cn-block-summary\">\n<div class=\"cn-block-summary__nav tabs\">\n        <span class=\"tabs__item is-selected\">Summary<\/span>\n    <\/div>\n<div class=\"cn-block-summary__content\">\n<ul class=\"wp-block-list\">\n<li>MyConstant founder Huynh Tran Quang Duy will pay over $10 million for misusing investor funds.<\/li>\n<li>Huynh used $11.9 million in investor funds to buy TerraUSD, losing nearly $8 million when the stablecoin collapsed.<\/li>\n<li>MyConstant ceased operations in 2022; the SEC settlement includes disgorgement and other restrictions.<\/li>\n<\/ul><\/div>\n<\/div>\n<p><!-- .cn-block-summary --><\/p>\n<h2 class=\"wp-block-heading\">What is MyConstant?<\/h2>\n<p>MyConstant was a peer-to-peer lending platform that operated under the name Const LLC. Founded in 2018 by Huynh Tran Quang Duy, also known as Duy Huynh, the platform claimed to offer high-yield investment opportunities by matching lenders and borrowers through crypto-collateralized loans.<\/p>\n<p>It advertised annual returns ranging from 6% to 10%, describing its products as low-risk and secured by cryptocurrencies. The platform primarily targeted U.S. investors and ultimately attracted over $20 million from more than 4,000 individuals between 2020 and 2022.<\/p>\n<p>Despite marketing itself as a crypto-secured loan matching service, MyConstant pooled investor funds and exercised full control over how that money was allocated.<\/p>\n<p>According to the SEC, the company did not consistently issue loans backed by crypto collateral as advertised. Instead, Huynh diverted large portions of the funds into personal accounts and high-risk crypto assets, violating the representations made to investors.<\/p>\n<p>He also generated fabricated loan summaries and marketing updates to maintain investor confidence and encourage reinvestment.<\/p>\n<p>    <!-- .cn-block-related-link --><\/p>\n<h2 class=\"wp-block-heading\">Allegations against MyConstant and Hyunh<\/h2>\n<p>The SEC <a rel=\"nofollow\" target=\"_blank\" href=\"https:\/\/www.sec.gov\/files\/litigation\/admin\/2025\/33-11382.pdf\" target=\"_blank\">found<\/a> that Huynh misappropriated approximately $415,000 for personal use and used at least $11.9 million of investor funds to purchase the algorithmic stablecoin TerraUSD (UST).\u00a0<\/p>\n<p>This move contradicted MyConstant\u2019s stated business model and risk profile.\u00a0<\/p>\n<p>When UST collapsed in May 2022, Huynh lost nearly $8 million in customer funds. Despite this, he continued to falsely reassure investors of the platform\u2019s stability by issuing misleading performance reports that claimed successful loan activity.<\/p>\n<p>Huynh\u2019s UST purchases appeared to be an attempt to deliver the high returns MyConstant promised. At the time, TerraUSD offered up to 20% annual returns through Anchor Protocol, a DeFi lending platform tied to the Terra blockchain.<\/p>\n<p>However, UST\u2019s value depended on its peg to the U.S. dollar, maintained through an algorithm linked to Terra\u2019s native token, LUNA. In May 2022, a sharp market crash triggered a depegging event that caused both tokens to collapse. MyConstant\u2019s exposure to UST became a catastrophic liability, and the platform ultimately ceased operations by November 2022.<\/p>\n<h2 class=\"wp-block-heading\">Past actions against MyConstant<\/h2>\n<p>MyConstant had already drawn the attention of state-level regulators prior to the SEC\u2019s investigation.\u00a0<\/p>\n<p>Back in December of 2022, the California Department of Financial Protection and Innovation issued a cease-and-desist order against the firm. The DFPI accused MyConstant of violating California securities laws by offering unregistered interest-bearing crypto products and operating as an unlicensed loan broker.<\/p>\n<p>By late 2022, MyConstant admitted it could no longer operate as normal and paused user withdrawals amid a wave of market turbulence and customer redemptions. So far, it has returned $1.8 million to investors and placed remaining assets\u2014reportedly less than $10 million\u2014in a trust for potential recovery.\u00a0<\/p>\n<p>The SEC\u2019s settlement marks the first formal action that could lead to wider restitution for affected investors.<\/p>\n<h2 class=\"wp-block-heading\">What\u2019s next for Huynh?<\/h2>\n<p>Under the terms of the SEC\u2019s order, Huynh must pay $8.3 million in disgorgement, $1.5 million in prejudgment interest, and a $750,000 civil penalty within 14 days. However, he consented to the settlement without admitting or denying the SEC\u2019s allegations.\u00a0<\/p>\n<p>In addition to the financial penalties, Huynh is barred from serving as an officer or director of any publicly registered company. The SEC may also establish a Fair Fund to distribute recovered funds to investors, depending on feasibility.<\/p>\n<p>    <!-- .cn-block-related-link --><\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>The United States Securities and Exchange Commission has finalized a settlement with the founder of MyConstant, ordering him to pay over $10 million in penalties and restitution for misusing investor&hellip;<\/p>\n","protected":false},"author":1,"featured_media":6374,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-6900","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency"],"_links":{"self":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts\/6900","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/comments?post=6900"}],"version-history":[{"count":1,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts\/6900\/revisions"}],"predecessor-version":[{"id":6901,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts\/6900\/revisions\/6901"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/media\/6374"}],"wp:attachment":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/media?parent=6900"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/categories?post=6900"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/tags?post=6900"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}