Trade jumps into hot water with SEC for $1.2 billion Terra deal

The US Securities and Exchange Commission (SEC) claims that Jump Trading earned $1.2 billion from a deal to boost Terra’s liquidity before it collapsed.

The agency filed court papers on Friday naming Jump as the anonymous beneficiary mentioned in its civil lawsuit against Kwon in December.

It gained quite a jump during the Terra Luna Bull market

Jump allegedly bought “tens of millions” of dollars in LUNA (now LUNC) token to restore the broken dollar peg of sister coin TerraUSD (UST). Kwon said Terra saved its $1 value through algorithms rather than Jump’s contribution.

According to SEC court filings, Kwon secretly disclosed Jump’s investment in 2020 to investors in Terraform Labs, the entity backing TerraUSD.

Email outlined a three-year agreement with crypto-related company Jump, Tai Mo Shan. The price of the LUNA device has increased from $0.20 in 2020 to more than $90 in 2022, and is claimed to have generated over $1 billion in profits.

LUNC/USD Rate Chart | Source: BeInCrypto

Responding to the charges, Kwon’s attorneys said that LUNA’s purchases from Jump represented only 6% of the Terraform transactions used to restore the terrestrial reservoir hook-up.

TerraUSD slumped to mere pennies in May 2022 after large weekend withdrawals broke its currency’s peg to the dollar, sending it and sister currency LUNA down. The two assets have kept TerraUSD algorithmically at $1.

The Securities and Exchange Commission and the US Department of Justice charged Kwon with the $40 billion crash of TerraUSD. The Stanford graduate remains under house arrest in Montenegro pending passport fraud trial.

Kwon’s lawyers will likely only formally respond to the criminal charges if the former crypto chief is extradited by the United States. They have asked US courts to dismiss civil charges they believe the SEC does not have jurisdiction to bring.

Jump Crypto’s CEO acknowledges the liquidity the company has provided for new projects

Terraform Labs investors recently lawsuit Jump Trading and its president, Kanav Kariya, following rumors on social media that Jump was the unnamed partner in the original SEC suit.

The suit alleges that Jump’s LUNA purchases of Terraform violated the US Commodity Exchange Act and other Commodity Futures Trading Commission (CTFC) rules. The CFTC regulates derivatives in the United States, including futures and options offered by Jump.

Investors claim that Jump’s Solana validator and acquisition of a wormhole artificially boosted the UST business.

Quantitative trading company Jump Trading began investing in cryptocurrencies through a new arm called Jump Crypto in 2021. Jump Crypto builds blockchain software and tools and contributes liquidity to crypto markets.

In 2021 Carre He said The projects asked the company to inject liquidity and pay early participation. The company also voted in Terra’s ruling proposals surrounding stable liquidity.

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Adhering to the Trust Project’s guidelines, BeInCrypto is committed to providing unbiased and transparent reporting. This news article aims to provide accurate and timely information. However, readers are advised to independently check the facts and consult with a professional before making any decisions based on this content.

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