A court filing from a US regulator confirms that Jump Trading secretly backed TerraForm Labs – the company behind the failed algorithmic stablecoin – about a year before the company collapsed.
Securities and Exchange Commission filed a document Last week showed a contract between Terraform and a Chicago-based company called Tai Mo Shan Ltd. – with an email address associated with Jump Trading.
According to the document, a November 2019 contract between TerraForm Labs and Tai Mo Shan Ltd specified a loan of 30 million LUNA over three years.
The document was signed by Do Kwon, CEO of Terraform Labs, and someone representing Tai Mo Shan Ltd., who, among others, media outlets A subsidiary of Terra.
block First reported in February that Jump was the unnamed “US firm” in the SEC’s complaint against Kwon.
SEC charges
seconds Was accused Terraform Labs and Quon defrauded investors in February involving an algorithmic stablecoin called Terrauest.
The SEC said, Terraform Labs and Kwon “secretly discussed with third parties that the third party would purchase substantial amounts of UST to restore the $1.00 peg.”
The company and Kwon said that Peg was reinstated due to decentralization, without mentioning third-party interference.
“While these efforts resulted in an increase in the price of UST, Defendants falsely and misleadingly represented to the public that UST’s algorithms successfully reconverted UST to dollars, thereby providing false and misleading information to the investing public.” There has been the impression that the re-peg had occurred without human intervention and misleadingly omitted the real reason for the re-peg: interference by a US trading firm, the SEC said in February.
Jump Trading did not immediately respond to a request for comment about the new court filing.
Teraust is an algorithmic stablecoin that uses market incentives through algorithms to maintain a stable value.
Terahost was also the largest algorithmic stablecoin before it crashed nearly a year ago, wiping out billions.