The U.S. Securities and Exchange Commission has finalized a $10.5 million settlement with Duy Huynh, founder of the now-defunct crypto lending platform MyConstant, for misusing investor funds and making false claims about the safety and structure of the company’s lending products. The settlement requires Huynh to pay the full amount in penalties and restitution. He agreed to the settlement without admitting or denying the SEC’s findings.
MyConstant, operated under Const LLC and founded in 2018, promised high-yield returns through peer-to-peer crypto-backed loans. The platform claimed its products were low-risk and secured by digital asset collateral, offering interest rates between 6% and 10%. Between 2020 and 2022, it raised over $20 million from more than 4,000 investors, primarily in the United States.
Despite marketing itself as a decentralized lending facilitator, the SEC found that MyConstant pooled investor funds and exercised centralized control over how those funds were used. Contrary to its stated business model, the company did not consistently issue loans backed by crypto collateral. Instead, large portions of investor funds were diverted into personal accounts and speculative crypto investments.
UST collapse exposes misconduct as SEC secures first federal settlement
The most notable violation involved Huynh’s decision to allocate at least $11.9 million of customer funds into TerraUSD (UST), an algorithmic stablecoin that collapsed in May 2022. The UST investment directly contradicted MyConstant’s advertised risk profile. Huynh lost nearly $8 million when UST depegged from the U.S. dollar and imploded, dragging the entire Terra ecosystem down with it.
UST Price Collapse – May 2022
TerraUSD (UST) lost its $1 peg and crashed below $0.10 within weeks. MyConstant’s investment of $11.9 million resulted in nearly $8 million in losses.
He continued to publish misleading reports even after the loss, falsely portraying loan performance and platform stability to retain investor confidence.The SEC confirmed that Huynh also misappropriated $415,000 for personal expenses and created fabricated loan summaries to maintain the illusion of normal operations. These actions, coupled with the high-risk UST investment, placed investor funds in significant jeopardy.
MyConstant had already faced enforcement action from California regulators in December 2022, when the Department of Financial Protection and Innovation issued a cease-and-desist order. The DFPI accused the platform of offering unregistered interest-bearing products and operating without a lending license. By late 2022, MyConstant paused withdrawals and acknowledged that it could no longer function as a viable lending service. It has since returned $1.8 million to customers and placed the remaining assets under $10 million in a trust for future recovery efforts.
The SEC’s action is the first federal settlement aimed at securing restitution for investors. Huynh has been permanently barred from serving as an officer or director of any publicly registered company. The SEC may also initiate a Fair Fund distribution if deemed practical to compensate victims.