Market maker Jump Trading signed an agreement with Terraform Labs (TFL) to support the TerraUSD (UST) exchange rate, thanks to which it earned about $1 billion. This follows from the materials SEC for the court, the journalists found out The Wall Street Journal.
The document submitted by the department is related to the accusations of TFL and its founder Do Kwon of fraud.
Later, the media reported that employees of Jump Crypto, a subsidiary of Jump Trading, were interrogated as part of the US Department of Justice investigation into the collapse of the Terra ecosystem.
The Commission’s lawsuit says that in the year before the collapse, UST fell to $0.9 before starting to recover. Do Kwon pointed to the bounce as an example of the “automatic self-healing” of an algostablecoin. He hoped to strengthen the faith of investors in the steadfastness of the peg to the US dollar thanks to the mechanism embedded inside the token.
Kwon did not disclose details of the Jump deal, which purchased TerraUSD for tens of millions of dollars to bring its price back to $1, the SEC said.
The documents officially confirm the information of some media and rumors on social networks that the market maker was an unnamed firm in the lawsuit of the department, the journalists noted.
In May 2023, the lawyers behind the TerraUSD crash-hit investor filed a class action lawsuit against Jump and its head of crypto.
In one of the documents submitted to the SEC, Kwon sent a letter to TFL investors notifying them of a “major agreement with Jump Trading” and asking that this information be kept secret at the request of the market maker.
The deal was supposed to improve the liquidity of UST and its associated utility token, LUNA. In January 2020, Jump received options to buy the latter at 30, 40 and 50 cents over the next three years. At the junction of 2021 and 2022, the asset rose in price to $90.
Another document released by the Commission in November 2019 approved an agreement between TFL and Tai Mo Shan, a subsidiary of Jump Crypto, detailing the terms of a three-year deal.
In the amended July 2021 release, Terraform Labs has committed to providing Tai Mo Shan with 61.5 million LUNA in monthly installments. It came after Kwon called on Jump to “save” UST in May 2021. The arrangements removed certain conditions that Jump previously had to meet in order to receive LUNA, according to the SEC.
In response to these allegations by the regulator regarding the unnamed market maker, TFL lawyers stated that the firm’s actions were not the only reason for TerraUSD’s recovery in May 2021. They cited data showing that market maker purchases accounted for only 6% of total transactions during that period.
On March 23, 2023, the Montenegrin police arrested Do Kwon, who was trying to fly from Podgorica airport to Dubai using forged documents.
The detention took place at the request of law enforcement agencies in the United States, Singapore and South Korea. Earlier, the media, citing the Seoul prosecutor’s office, reported that he was hiding in Serbia.
In May, South Korea called on Montenegro to send Do Kwon home. The United States is also applying for the extradition of the head of the TFL.
The procedure for the extradition of the CEO of the company will begin after the Montenegrin authorities complete the trial in the case of forgery. Kwon pleaded not guilty to the charges.
As a reminder, a court in Montenegro approved a bail of €400,000 (~$436,000) for Do Kwon.
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Market maker Jump Trading signed an agreement with Terraform Labs (TFL) to support the TerraUSD (UST) exchange rate, thanks to which it earned about $1 billion. This follows from the materials SEC for the court, the journalists found out The Wall Street Journal.
The document submitted by the department is related to the accusations of TFL and its founder Do Kwon of fraud.
Later, the media reported that employees of Jump Crypto, a subsidiary of Jump Trading, were interrogated as part of the US Department of Justice investigation into the collapse of the Terra ecosystem.
The Commission’s lawsuit says that in the year before the collapse, UST fell to $0.9 before starting to recover. Do Kwon pointed to the bounce as an example of the “automatic self-healing” of an algostablecoin. He hoped to strengthen the faith of investors in the steadfastness of the peg to the US dollar thanks to the mechanism embedded inside the token.
Kwon did not disclose details of the Jump deal, which purchased TerraUSD for tens of millions of dollars to bring its price back to $1, the SEC said.
The documents officially confirm the information of some media and rumors on social networks that the market maker was an unnamed firm in the lawsuit of the department, the journalists noted.
In May 2023, the lawyers behind the TerraUSD crash-hit investor filed a class action lawsuit against Jump and its head of crypto.
In one of the documents submitted to the SEC, Kwon sent a letter to TFL investors notifying them of a “major agreement with Jump Trading” and asking that this information be kept secret at the request of the market maker.
The deal was supposed to improve the liquidity of UST and its associated utility token, LUNA. In January 2020, Jump received options to buy the latter at 30, 40 and 50 cents over the next three years. At the junction of 2021 and 2022, the asset rose in price to $90.
Another document released by the Commission in November 2019 approved an agreement between TFL and Tai Mo Shan, a subsidiary of Jump Crypto, detailing the terms of a three-year deal.
In the amended July 2021 release, Terraform Labs has committed to providing Tai Mo Shan with 61.5 million LUNA in monthly installments. It came after Kwon called on Jump to “save” UST in May 2021. The arrangements removed certain conditions that Jump previously had to meet in order to receive LUNA, according to the SEC.
In response to these allegations by the regulator regarding the unnamed market maker, TFL lawyers stated that the firm’s actions were not the only reason for TerraUSD’s recovery in May 2021. They cited data showing that market maker purchases accounted for only 6% of total transactions during that period.
On March 23, 2023, the Montenegrin police arrested Do Kwon, who was trying to fly from Podgorica airport to Dubai using forged documents.
The detention took place at the request of law enforcement agencies in the United States, Singapore and South Korea. Earlier, the media, citing the Seoul prosecutor’s office, reported that he was hiding in Serbia.
In May, South Korea called on Montenegro to send Do Kwon home. The United States is also applying for the extradition of the head of the TFL.
The procedure for the extradition of the CEO of the company will begin after the Montenegrin authorities complete the trial in the case of forgery. Kwon pleaded not guilty to the charges.
As a reminder, a court in Montenegro approved a bail of €400,000 (~$436,000) for Do Kwon.
Found a mistake in the text? Select it and press CTRL+ENTER
Cryplogger Newsletters: Keep your finger on the pulse of the bitcoin industry!
