Jump Trading has been sued for conspiring to manipulate the price of TerraUSD (UST) following the unprecedented collapse of the stablecoin.
Filed by Taewoo Kim, a resident of New Jersey trial On behalf of the affected investors, it is alleged that Jump Trading obtained a sufficient amount of UST to manipulate its value towards $1, misleading investors about its true value and the risks associated with the token.
The lawsuit claimed that the Chicago business magnate colluded with Do Kwon, the then CEO of TerraForm Labs, to drive up the price of UST.
It was also noted that Jump Trading was an early partner and financial backer of Terraform Labs.
“Rather than publicly admitting the inability of TfL’s algorithms to maintain the advertised peg price of UST, TfL and Quon secretly conspired with Defendant Jump to manipulate market prices for UST and Aust.” Planned by making secret, coordinated trades to raise the U.S. to a $1 peg.”
Specifically, the lawsuit states that Jump Trading purchased over 62 million tokens from May 23 to May 27, 2021.
According to the filing, the purchases were made across multiple crypto exchanges in order to better hide their manipulative operations.
The plaintiffs are accusing Jump and its CEO Kanav Karia of violating both the Commodity Exchange Act and Commodity Futures Trading Commission (CFTC) regulations, as well as common law unjust enrichment.
As a result of this scheme, Jump reportedly made a staggering profit of over $1.28 billion by selling heavily discounted LUNA tokens acquired through the amended protocol.
The lawsuit reads, “Plaintiff’s allegations are based upon personal knowledge as to himself and his own actions, and upon information and belief regarding all other matters which are based upon investigation by and through Plaintiff’s attorneys.” ”
It is worth noting that the SEC legal filing Against Terraform Labs and its CEO Do Kwon said they allegedly sought assistance from an unnamed US trading firm to manipulate the market price of UST.
Taewoo Kim’s lawsuit speculates that the unnamed firm is Jump Trading.
Jump Trading To Scale Back Crypto Operations
As informed ofJump Crypto, the crypto division of Jump Trading, is scaling down its digital asset trading activities in the US due to increased regulatory pressure.
Jump Trading has recently faced regulatory scrutiny in the US following the crypto meltdown that has seen the collapse of several high-profile crypto companies.
While the firm is still actively making markets in cryptocurrencies, it is doing so on a smaller scale than before. The company has no plans to completely abandon crypto.
Meanwhile, Quan, who was arrested back in March in Montenegro, has been Free From jail on bail of 400,000 euros ($440,320), he is pending trial on local charges.
