- Class action lawsuit filed against brokerage firm
- Jump Trading allegedly “rescued” UST when the asset lost its USD peg in 2021
- For this, the company received a huge amount of LUNA almost for free.
- These tokens were sold when the price went up, which brought the company $1.28 billion in profit.
Last week against Jump Trading was filed class action. Victims accuse the company of links with the collapsed Terra-Luna project, “pumping” UST liquidity and unjust enrichment in the amount of $1.28 billion.
According to the case file, in 2021 Jump Trading privately bought out 62 million UST. This allowed the stablecoin to return to the dollar.
Later, one of the co-founders of Terraform Labs, Do Kwon, positioned this jump in the asset’s price as “self-healing ability.” The authors of the lawsuit claim that this thesis served to promote the stablecoin.
Interestingly, earlier the SEC (Securities and Exchange Commission) in its complaint accused an unnamed Terra-Luna trading partner of market making. Apparently, this company was Jump Trading.
The lawsuit says that for “saving UST” the company was able to buy out a significant amount of LUNA “at a 99.9% discount.” The crypto assets were then sold, bringing the organization $1.28 billion in revenue.
As a reminder, yesterday, May 15, WSJ published a material confirming prop-trading based on Terra. Among other things, there is mention of a letter from Do Kwon to investors in which he mentions an “important agreement” with Jump.
The co-founder of the failed project himself is awaiting trial in Montenegro on charges of forging documents. He was recently released on $436,000 bail.
Interestingly, Jump Trading and Jane Street are gradually distancing themselves from cryptocurrencies. Both companies see regulatory ambiguity as a significant impediment to further development in this market.