The US Securities and Exchange Commission faces an Aug. 20 deadline to submit a plan for distributing a $123.1 million fund paid by Jump Crypto subsidiary Tai Mo Shan to investors affected by the 2022 collapse of Terra.
The upcoming proposal is expected to outline investor eligibility criteria, loss calculation methods, claim requirements, and payment procedures. An SEC order issued in February granted staff until Aug. 20 to file the distribution plan after allowing extra time to develop the methodology and coordinate with separate Terraform Labs litigation recoveries.
The deadline marks a procedural step and does not mean investors will immediately receive funds. Actual payouts will depend on the final distribution framework and subsequent regulatory steps.
Tai Mo Shan has already paid the full $123.1 million ordered by the SEC, which includes $73.45 million in disgorgement, $12.92 million in prejudgment interest, and a $36.73 million civil penalty. The funds and any accrued interest are currently held in a Fair Fund.
The SEC established the fund after concluding that Tai Mo Shan negligently misled investors during the May 2022 depeg of TerraUSD and acted as a statutory underwriter for certain Terra LUNA sales. Tai Mo Shan settled the matter without admitting or denying the findings.
Distributing the money has been complicated by a separate recovery track involving Terraform Labs bankruptcy proceedings. Claims filed in the bankruptcy process do not automatically grant eligibility for the Tai Mo Shan fund, leaving the regulator to determine how the two recovery processes will interact.
