{"id":10558,"date":"2025-08-06T19:41:13","date_gmt":"2025-08-06T19:41:13","guid":{"rendered":"https:\/\/cryptonewsdesk.com\/?p=10558"},"modified":"2025-08-06T19:41:16","modified_gmt":"2025-08-06T19:41:16","slug":"myconstant-founder-fined-10m-after-misusing-investor-funds-and-betting-big-on-collapsed-terrausd","status":"publish","type":"post","link":"https:\/\/cryptonewsdesk.com\/index.php\/2025\/08\/06\/myconstant-founder-fined-10m-after-misusing-investor-funds-and-betting-big-on-collapsed-terrausd\/","title":{"rendered":"MyConstant Founder Fined $10M After Misusing Investor Funds and Betting Big on Collapsed TerraUSD"},"content":{"rendered":"\n<p>The U.S. Securities and Exchange Commission (SEC) has finalized a major enforcement action against <strong>Huynh Tran Quang Duy<\/strong>, founder of the now-defunct crypto lending platform <strong>MyConstant<\/strong>. The regulator has ordered Huynh to pay more than <strong>$10 million in penalties and restitution<\/strong> after finding that he <strong>misused investor funds, made false claims<\/strong>, and <strong>put customer money into risky bets<\/strong> that ultimately backfired.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What Was MyConstant?<\/h3>\n\n\n\n<p>Launched in 2018 under the legal name <strong>Const LLC<\/strong>, MyConstant was promoted as a <strong>peer-to-peer lending platform<\/strong> that offered high-yield investment opportunities through <strong>crypto-collateralized loans<\/strong>. The pitch? Annual returns between <strong>6% and 10%<\/strong>, marketed as <strong>low-risk<\/strong> thanks to crypto-backed security.<\/p>\n\n\n\n<p>But behind the scenes, the platform operated quite differently.<\/p>\n\n\n\n<p>Instead of simply connecting lenders with borrowers, MyConstant <strong>pooled investor funds<\/strong> and retained full control over how the money was used <strong>a key detail it failed to disclose to users<\/strong>. Between 2020 and 2022, the company raised more than <strong>$20 million from over 4,000 investors<\/strong>, most of them based in the U.S.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">SEC Findings: A Trail of Misrepresentation and Risky Bets<\/h3>\n\n\n\n<p>The SEC investigation found that Huynh <strong>routinely misrepresented how MyConstant operated<\/strong>. While investors believed their money was going into crypto-secured loans, <strong>Huynh used at least $11.9 million<\/strong> to purchase <strong>TerraUSD (UST)<\/strong> the so-called algorithmic stablecoin that <strong>famously collapsed in May 2022<\/strong>.<\/p>\n\n\n\n<p>Of that amount, nearly <strong>$8 million was lost<\/strong> when UST lost its peg to the U.S. dollar and triggered the downfall of the entire Terra ecosystem.<\/p>\n\n\n\n<p>Even after the collapse, Huynh continued to <strong>issue fake performance updates and loan summaries<\/strong>, trying to keep investor confidence intact and encouraging more deposits. He also <strong>misappropriated around $415,000 for personal use<\/strong>, according to the SEC.<\/p>\n\n\n\n<p>Huynh\u2019s gamble on UST was likely a move to chase higher yields. At the time, <strong>Anchor Protocol<\/strong>, a DeFi platform tied to Terra, promised <strong>up to 20% annual returns<\/strong> on UST deposits. But that promise crumbled when the token&#8217;s algorithmic peg system failed, wiping out billions in value across the crypto space.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Collapse and Regulatory Fallout<\/h3>\n\n\n\n<p>By <strong>November 2022<\/strong>, MyConstant had shut down, citing market instability and mass withdrawals. Prior to the SEC\u2019s action, the platform had already faced scrutiny from <strong>California state regulators<\/strong>.<\/p>\n\n\n\n<p>In December 2022, the <strong>California Department of Financial Protection and Innovation (DFPI)<\/strong> issued a cease-and-desist order, accusing the company of <strong>illegally offering unregistered securities<\/strong> and <strong>operating as an unlicensed lender<\/strong>.<\/p>\n\n\n\n<p>MyConstant eventually admitted it could not meet customer withdrawals and paused operations. So far, it has returned <strong>$1.8 million to investors<\/strong>, while placing under <strong>$10 million in remaining assets<\/strong> into a trust for potential recovery.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">The SEC\u2019s Verdict: $10M+ in Penalties and Bans<\/h3>\n\n\n\n<p>Under the terms of the SEC\u2019s settlement, Huynh has agreed to pay:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>$8.3 million in disgorgement<\/strong><\/li>\n\n\n\n<li><strong>$1.5 million in prejudgment interest<\/strong><\/li>\n\n\n\n<li><strong>$750,000 civil penalty<\/strong><\/li>\n<\/ul>\n\n\n\n<p>All payments must be made <strong>within 14 days<\/strong>. While Huynh consented to the settlement, he <strong>did not admit or deny the SEC\u2019s allegations<\/strong>.<\/p>\n\n\n\n<p>In addition to the financial penalties, he is <strong>barred from serving as an officer or director of any publicly registered company<\/strong>. The SEC also signaled it may establish a <strong>Fair Fund<\/strong> to help return the recovered money to defrauded investors.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Final Thoughts<\/h3>\n\n\n\n<p>This case serves as another stark reminder of the <strong>risks behind flashy crypto lending platforms<\/strong> and the <strong>real consequences<\/strong> when investor trust is abused. MyConstant promised safety and yield but delivered mismanagement, deception, and loss.<\/p>\n\n\n\n<p>The SEC\u2019s action may not erase the damage done, but it\u2019s a clear warning to other platforms: <strong>transparency, accountability, and proper oversight aren\u2019t optional they\u2019re essential.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>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&#8230;<\/p>\n","protected":false},"author":3,"featured_media":10559,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[63,70],"tags":[65,77],"class_list":["post-10558","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-crypto-news","category-finance","tag-crypto","tag-sec"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>MyConstant Founder Fined $10M After Misusing Investor Funds and Betting Big on Collapsed TerraUSD - Crypto News<\/title>\n<meta name=\"description\" content=\"The SEC has fined MyConstant founder Huynh Tran Quang Duy over $10 million for misusing investor funds and misleading users. 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