A crypto lending platform founder has agreed to pay over $10.5 million to settle fraud charges with the U.S. Securities and Exchange Commission (SEC) after using investor money to buy the now-failed TerraUSD stablecoin.

Duy Huynh, also known as Huynh Tran Quang Duy, ran the lending firm MyConstant, which told investors their funds would be matched into secure crypto-backed loans promising up to 10% returns. Instead, the SEC says Huynh misused $11.9 million of customer money to buy TerraUSD (UST), a stablecoin that collapsed in May 2022, triggering billions in losses across the crypto industry.

The SEC order states that MyConstant raised over $20 million from more than 4,000 investors between 2020 and 2022, falsely marketing the scheme as “low risk.” When UST collapsed, Huynh reportedly lost over $7.9 million and used fake loan summaries to reassure customers their funds were safe. He also allegedly diverted $415,000 for personal use.

Under the settlement, Huynh will repay over $8.3 million in ill-gotten gains, $1.5 million in interest, and a $750,000 penalty—all without admitting or denying wrongdoing. MyConstant shut down in late 2022 after returning $1.8 million to users and placing remaining assets in a creditor trust.

TerraUSD was part of the Terra blockchain ecosystem and promised returns of up to 20% via Anchor Protocol. It collapsed when its sister token LUNA lost value, causing UST to lose its $1 peg and sparking a crypto-wide meltdown. Terra co-founder Do Kwon is currently facing fraud charges in the U.S. over the event.

Huynh’s actions mark another high-profile example of mismanagement and deception in the crypto lending sector.