New Developments in the Terra-SEC Case: Explosive Revelations Unveil Startling Events leading to the LUNA Collapse
In a dramatic turn of events, James Hunsaker, a former employee of Jump Trading, has made a jaw-dropping revelation in the ongoing Terraform Labs case. Hunsaker disclosed that he had filed a notice against Jump Trading with the SEC, implicating Do Kwon in the UST algorithmic stablecoin’s catastrophic $40 billion collapse in 2022.
What emerges from Hunsaker’s statement is that Jump Trading, an enigmatic and prolific trading firm with a stake in the cryptocurrency industry, had entered into a “significant agreement” with Terraform Labs (TFL) aimed at bolstering the adoption of UST.
Hunsaker, who had significant experience at Jump Crypto before founding his own blockchain startup, Monad Labs, disclosed that when UST deviated from its $1 peg in May 2021, Jump Crypto President Kanav Kariya had conveyed to him, “I talked to Do, he will give us tokens to be unlocked later.” This admission sheds light on Kwon’s involvement in the UST fluctuation.
Following this conversation, Bill DiSomma, co-founder of Jump Trading, directed investors to engage in “aggressive trades” in order to amass UST. Hunsaker described DiSomma as the true authority at Jump Crypto, overshadowing Kariya. “Given that Terra was a pivotal and vital project for Jump, he was willing to risk hundreds of millions of dollars,” testified Hunsaker.
Both Kariya and DiSomma opted to refrain from responding to the SEC’s inquiries regarding the Terraform Labs case. The SEC uncovered that Jump Trading raked in approximately $1 billion in profits through its dealings with Terraform Labs.
An integral element of the SEC’s fraud case against TFL and Do Kwon involved their alleged concealment of Jump’s intervention in rescuing UST during the May 2021 depegging, prior to the eventual collapse in 2022. Kwon had assured investors that UST possessed an inherent capacity for self-restoration, a claim that investors accepted at face value.
Hunsaker, who departed from Jump in February 2022, attempted to anonymously share her experiences and concerns on Reddit following the May debacle. Subsequently, in August 2022, she submitted a whistleblower complaint to the SEC. “Witnessing the devastating consequences of May 2022 on all the victims, I felt compelled to seek some semblance of justice and compensation,” Hunsaker proclaimed in court.
Interestingly, it has come to light that Hunsaker had invested $200,000 of her personal funds into UST, aiming to secure a robust ~20% return via the Anchor Protocol. Despite harboring doubts about UST’s stability, she believed that she could exit swiftly when required. Hunsaker offloaded her UST holdings on May 7 or 8, 2022, precisely when the depegging commenced.
These latest revelations in the Terra-SEC case have sent shockwaves throughout the cryptocurrency industry, unraveling a web of complex interactions and hidden motives that lie behind the LUNA collapse. As the legal proceedings continue, observers anticipate further astonishing disclosures that may impact the future of algorithmic stablecoins and the actions of influential market players.