The founder of the now-defunct crypto lending platform MyConstant, Huynh Tran Quang Duy—also known as Duy Huynh—has agreed to a $10.5 million settlement with the U.S. Securities and Exchange Commission (SEC) over allegations that he misused investor funds to purchase TerraUSD (UST) before its dramatic collapse in 2022.
According to the SEC’s order issued Tuesday, Huynh misled thousands of investors by promoting MyConstant as a low-risk loan matching service backed by crypto assets, promising returns of up to 10%. In reality, the agency claims he diverted $11.9 million of customer funds to buy UST, a stablecoin tied to the now-failed Terra blockchain.
The SEC said MyConstant raised more than $20 million from over 4,000 investors between September 2020 and November 2022. The platform promoted its offerings as secure and profitable, claiming investors’ funds were being pooled and lent in crypto-backed loans. However, most of those funds were used for high-risk purchases of UST and personal expenses.
Huynh allegedly lost over $7.9 million on his TerraUSD investments during the May 2022 market crash that wiped out billions in crypto value. He also misappropriated around $415,000 for personal use, according to regulators.
Despite the massive losses, Huynh reportedly sent misleading investment summaries to reassure clients and encourage reinvestment, showing fake loan records to mask the losses.
The SEC’s settlement requires Huynh to pay more than $8.3 million in disgorgement, $1.5 million in prejudgment interest, and a civil penalty of $750,000 within 14 days. While he neither admitted nor denied the charges, he has agreed to return funds to affected investors.
MyConstant halted operations in November 2022, citing the broader crypto downturn and a wave of bankruptcies across the industry. The platform has since returned $1.8 million to investors and transferred its remaining assets into a creditor trust.
This SEC action follows prior regulatory pressure from California’s Department of Financial Protection and Innovation, which had ordered MyConstant to shut down for violating state securities laws.
Terra co-founder Do Kwon currently awaits trial in the United States on multiple fraud charges related to the blockchain’s collapse.
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