The U.S. Securities and Exchange Commission (SEC) has finalized a major enforcement action against Huynh Tran Quang Duy, founder of the now-defunct crypto lending platform MyConstant. The regulator has ordered Huynh to pay more than $10 million in penalties and restitution after finding that he misused investor funds, made false claims, and put customer money into risky bets that ultimately backfired.
What Was MyConstant?
Launched in 2018 under the legal name Const LLC, MyConstant was promoted as a peer-to-peer lending platform that offered high-yield investment opportunities through crypto-collateralized loans. The pitch? Annual returns between 6% and 10%, marketed as low-risk thanks to crypto-backed security.
But behind the scenes, the platform operated quite differently.
Instead of simply connecting lenders with borrowers, MyConstant pooled investor funds and retained full control over how the money was used a key detail it failed to disclose to users. Between 2020 and 2022, the company raised more than $20 million from over 4,000 investors, most of them based in the U.S.
SEC Findings: A Trail of Misrepresentation and Risky Bets
The SEC investigation found that Huynh routinely misrepresented how MyConstant operated. While investors believed their money was going into crypto-secured loans, Huynh used at least $11.9 million to purchase TerraUSD (UST) the so-called algorithmic stablecoin that famously collapsed in May 2022.
Of that amount, nearly $8 million was lost when UST lost its peg to the U.S. dollar and triggered the downfall of the entire Terra ecosystem.
Even after the collapse, Huynh continued to issue fake performance updates and loan summaries, trying to keep investor confidence intact and encouraging more deposits. He also misappropriated around $415,000 for personal use, according to the SEC.
Huynh’s gamble on UST was likely a move to chase higher yields. At the time, Anchor Protocol, a DeFi platform tied to Terra, promised up to 20% annual returns on UST deposits. But that promise crumbled when the token’s algorithmic peg system failed, wiping out billions in value across the crypto space.
Collapse and Regulatory Fallout
By November 2022, MyConstant had shut down, citing market instability and mass withdrawals. Prior to the SEC’s action, the platform had already faced scrutiny from California state regulators.
In December 2022, the California Department of Financial Protection and Innovation (DFPI) issued a cease-and-desist order, accusing the company of illegally offering unregistered securities and operating as an unlicensed lender.
MyConstant eventually admitted it could not meet customer withdrawals and paused operations. So far, it has returned $1.8 million to investors, while placing under $10 million in remaining assets into a trust for potential recovery.
The SEC’s Verdict: $10M+ in Penalties and Bans
Under the terms of the SEC’s settlement, Huynh has agreed to pay:
- $8.3 million in disgorgement
- $1.5 million in prejudgment interest
- $750,000 civil penalty
All payments must be made within 14 days. While Huynh consented to the settlement, he did not admit or deny the SEC’s allegations.
In addition to the financial penalties, he is barred from serving as an officer or director of any publicly registered company. The SEC also signaled it may establish a Fair Fund to help return the recovered money to defrauded investors.
Final Thoughts
This case serves as another stark reminder of the risks behind flashy crypto lending platforms and the real consequences when investor trust is abused. MyConstant promised safety and yield but delivered mismanagement, deception, and loss.
The SEC’s action may not erase the damage done, but it’s a clear warning to other platforms: transparency, accountability, and proper oversight aren’t optional they’re essential.
