SEC faces deadline to plan $123 million Terra investor recovery

The U.S. Securities and Exchange Commission (SEC) faces an August 20 deadline to submit a distribution plan for a $123.1 million fund intended for investors harmed by the 2022 Terra collapse. The funds were paid by Tai Mo Shan, a subsidiary of Jump Crypto, following a settlement in which the company did not admit or deny findings that it negligently misled investors during the TerraUSD depegging event.

The $123.1 million total consists of $73.45 million in disgorgement, $12.92 million in prejudgment interest, and $36.73 million in civil penalties. The money is currently held in a Fair Fund.

The upcoming proposal will outline investor eligibility, loss calculation methodologies, claim requirements, and payment procedures. The SEC previously extended the deadline to allow for coordination with separate recovery efforts stemming from the Terraform Labs bankruptcy proceedings. The submission of the plan does not guarantee immediate payouts, as actual distributions will depend on the finalized framework and subsequent regulatory steps.