In the Matter of Tai Mo Shan Limited

Admin. Proc. File No. 3-22382

On December 20, 2024, the Commission instituted and simultaneously settled cease-and-desist proceedings (the “Order”) against Tai Mo Shan Limited (the “Respondent”). The Respondent is a wholly owned subsidiary of Jump Crypto Holdings LLC. In the Order, the Commission found that, from January 2021 to May 2022, the Respondent, directly or indirectly, offered and sold securities through the use of interstate commerce when no registration statement was in effect with respect to these offers and sales. According to the Order, the Respondent acted as a statutory underwriter with respect to certain of its offers and sales of LUNA, a crypto asset issued by Terraform Labs PTE Ltd. (“Terraform”) and offered and sold as a security. The Commission found that, as a result of this conduct, the Respondent violated Sections 5(a) and (c) of the Securities Act. The Commission further found that the Respondent negligently engaged in a course of conduct in May 2021 that misled members of the investing public about the efficacy of Terraform’s so-called “algorithmic stablecoin,” UST, when it dropped in value from its $1 peg. According to the Order, in light of prior statements by Terraform that its algorithmic mechanism would maintain UST’s $1 peg, the Respondent acted negligently by trading UST in a manner that deceived the market that Terraform’s algorithmic mechanism was working as intended to stabilize UST’s price at $1. The Commission found that as a result of its negligent conduct, the Respondent violated Section 17(a)(3) of the Securities Act.

The Commission ordered the Respondent to pay disgorgement of $73,452,756, prejudgment interest of $12,916,153, and a $36,726,378 civil money penalty, for a total of $123,095,287 to the Commission. The Commission also created a Fair Fund pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, so the penalty collected, along with collected disgorgement and prejudgment interest, can be distributed to harmed investors (the “Fair Fund”). See the Commission’s Order: Release No. 33-11349.

The Respondent has paid in full. The Fair Fund has been deposited in a Commission-designated account at the U.S. Department of the Treasury, and any accrued interest will be added to, and become a part of, the Fair Fund.

On March 13, 2025, the Commission issued an order appointing Miller Kaplan Arase LLP, as the Tax Administrator of the Fair Fund. See the Commission’s Order: Release No. 34-102662.

For more information, please contact the Commission:

Office of Distributions
Email: ENFOfficeofDistributions@sec.gov