The Terra ecosystem collapse continues to send shockwaves through the cryptocurrency industry, with another significant development emerging from the defunct lending platform MyConstant. The platform’s founder, Duy Huynh, has reached a $10.5 million settlement agreement with the U.S. Securities and Exchange Commission following allegations that he misappropriated customer funds to make high-risk bets on TerraUSD (UST) prior to its spectacular failure.
Operating under both his Vietnamese and American identities, Huynh marketed MyConstant as a conservative crypto lending service offering steady returns reaching up to 10%. However, rather than delivering on these promises, he redirected $11.9 million in investor funds toward UST investments—the stablecoin that infamously crashed in 2022 and triggered widespread market turmoil.
🔔 #Crypto Exec to Pay $10.5M Over Misuse of Funds on #TerraUSD Bet !
Duy Huynh, founder of defunct platform MyConstant, will pay over $10.5 million to settle @SECGov claims he misused investor funds to buy TerraUSD before its collapse. The SEC alleges Huynh falsely marketed the… pic.twitter.com/EcMucoyzy3
— Altcoin Alerts (@Altcoin_Alerts) August 6, 2025
Massive Losses and Misuse of Funds
What investors believed to be a secure investment opportunity quickly transformed into a financial catastrophe. The UST investments resulted in losses of nearly $8 million, while the SEC additionally alleges that Huynh inappropriately used more than $400,000 for personal expenditures. Throughout this period, he allegedly provided investors with deceptive communications designed to hide the company’s deteriorating financial condition.
Instead of fighting the allegations in court, Huynh chose to settle the matter. The agreement requires him to return $8.3 million to affected investors, pay $1.5 million in interest charges, and remit a $750,000 civil penalty—all while maintaining his innocence. MyConstant ceased operations in November 2022 and transferred its remaining assets into a creditor trust, though only a small portion of the lost funds has been recovered thus far.
Regulatory Implications for Crypto Lending
This case represents another significant enforcement action by the SEC against crypto lending platforms that failed to protect investor interests. The settlement underscores the regulatory scrutiny facing digital asset businesses and highlights the risks associated with unregulated lending services in the cryptocurrency space.
Market Implications
This settlement adds to the ongoing regulatory pressure facing crypto lending platforms but is unlikely to significantly impact broader market sentiment given the contained nature of the case. The enforcement action reinforces existing concerns about platform transparency and investor protection in the digital asset lending sector.
Leave a comment