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SEC has Aug. 20 deadline for $123.1 million Terra investor payout plan
The SEC has already required Tai Mo Shan to pay the full $123.1 million and hold it in a Fair Fund, but eligibility and the claims and payment timeline still depend on the regulator’s distribution framework.
The US Securities and Exchange Commission faces an Aug. 20 deadline to submit a plan for distributing a $123.1 million recovery fund tied to investors harmed by Terra’s 2022 collapse, according to CryptoSlate. The proposal is expected to spell out who qualifies, how losses will be calculated, whether investors must submit claims, and how and when payments would be made.
An SEC order issued in February gave staff until Aug. 20 to file the distribution framework after granting additional time to develop the methodology and coordinate with recoveries from separate Terraform Labs litigation. The regulator’s deadline does not mean investors will receive money immediately on Aug. 20, because any payout would follow the approval and implementation of the distribution steps.
The fund stems from payments made by Jump Crypto subsidiary Tai Mo Shan, which has already paid the full $123.1 million ordered by the SEC. That total includes $73.45 million in disgorgement, $12.92 million in prejudgment interest, and a $36.73 million civil penalty, with the money held in a Fair Fund for eventual distribution to eligible investors.
CryptoSlate reports that determining eligibility has been complicated by a separate recovery track in Terraform Labs’ bankruptcy process, where losses tied to the collapse follow a different claims process. A claim in bankruptcy does not automatically establish eligibility for the Tai Mo Shan fund, leaving the SEC to determine how the two recovery tracks interact and how eligible losses should be measured.