Jump Trading's crypto division, Tai Mo Shan, agrees to pay $123 million to settle charges from U.S. regulators

Jump Trading's cryptocurrency division, Tai Mo Shan Ltd., has agreed to pay $123 million to settle allegations by U.S. regulators that it misled investors about the stability of its TerraUSD algorithmic stablecoin. The U.S. Securities and Exchange Commission said in a statement on Friday that the company also resolved charges that it violated securities laws when underwriting TerraUSD's sister token Luna.

Tai Mo Shan did not admit or deny the agency's allegations when agreeing to the settlement. TerraUSD was supposed to maintain a constant value of 1 dollar through complex algorithms involving Luna and trader incentive mechanisms. The U.S. Securities and Exchange Commission claimed that in reality, Tai Mo Shan's large-scale purchasing behavior helped stabilize the coin, deceiving the market into believing that the algorithmic mechanism was working effectively.