SEC Slams MyConstant Founder with $10M Penalty for Misused Funds—Crypto’s Latest Black Eye

Crypto's compliance reckoning continues as regulators drop the hammer.

The SEC just made an example of MyConstant's founder—ordering a staggering $10 million payout for alleged fund mismanagement. Another day, another crypto scandal draining investor trust.

When will the industry learn? Compliance isn't optional—even in decentralized fantasyland.

MyConstant Shuts Down After Terra Crash

The firm abruptly ceased operations in November 2022, citing the crypto market crash and massive customer withdrawals. MyConstant has so far reimbursed investors around $1.8 million and placed the remaining assets (less than $10 million) in trust for repayment to investors.

Moreover, Huynh’s investment was tied to Anchor Protocol, which offered high returns on TerraUSD (UST) stablecoin deposits. But when the market fell and users withdrew funds, Terra’s system crashed dramatically. UST stablecoin lost its $1 peg, and its sister token LUNA crashed too. The entire collapse wiped out billions from the crypto market.

SEC Orders Penalties and Ban

Under the terms of the settlement, Huynh is required to pay $8.3 million in ill-gotten gains, which represent the profits he unlawfully obtained through misleading investors. Alongside, he is required to pay $1.5 million as prejudgment interest and ordered to pay a $750,000 civil penalty within 14 days. 

Further, Huynh is also banned for lifetime from being an officer or director of any public company in the future, which disqualifies him from occupying positions of authority in companies registered with the SEC.

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