- A class action lawsuit was filed against the brokerage firm
- Jump Trading allegedly “saved” UST when the asset lost its USD peg in 2021
- For this, the company received almost free huge amounts of LUNA
- These tokens were sold when the rate went up, bringing the firm $1.28 billion in profit
A class action suit was filed against Jump Trading last week. The victims accuse the company of having ties to the collapsed Terra-Luna project, “pumping” UST liquidity and unjust enrichment of $1.28 billion.
According to the case file, Jump Trading privately bought 62 million UST in 2021. This allowed the Stablecoin to regain its peg to the dollar.
Later, one of the co-founders of Terraform Labs, Do Kwon, positioned this jump in the asset’s value as a “self-recovering ability.”
The authors of the lawsuit claim that this thesis served to promote stabelcoin.
It is interesting that the SEC (Securities and Exchange Commission) earlier in its complaint accused an unnamed trading partner of Terra-Luna of market-making.
Apparently, that company was Jump Trading.
The suit says that for “saving UST,” the firm was given the opportunity to buy a significant amount of LUNA “at a 99.9% discount.”. The crypto-assets were then sold, bringing the organization $1.28 billion in revenue.
We recall that yesterday, May 15, the WSJ published a story confirming the Terra-based prop-trading.
Among other things, it mentions Do Kwon’s letter 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 document forgery.. He was recently released on $436,000 bail.
It’s interesting that Jump Trading and Jane Street are gradually distancing themselves from cryptocurrency.
Both companies consider regulatory ambiguity a significant barrier to further development in this market.