• Wed. May 29th, 2024

Jump is the ‘US trading firm’ that made $1.28 billion off LUNA: report

  • Jump Crypto is reportedly the unidentified US trading firm” the SEC says helped re-peg TerraUSD in 2021.
  • Terraform Labs and its CEO Do Kwon misrepresented the human effort as a software algorithm.
  • Jump was able to buy Luna tokens at massive discounts leading to a profit of over $1.28 billion, though the SEC has filed a wrongdoing charge against the trading firm.

When the US Securities and Exchange Commission (SEC) sued Terraform Labs and its CEO Do Kwon, it pointed to an unnamed US-based trading firm as having realized massive profits from deals with Terra (LUNA).

Now sources say that firm is Jump Crypto, a Chicago-based subsidiary of Jump Trading, according to a report first shared by crypto publication The Block. Per the report, it is Jump Crypto that helped TerraUSD (UST) – an algorithmic stablecoin launched by Do Kwon – regain its peg in 2021.

Do Kwon’s Terra project collapsed in May 2022, while Jump had been providing market making services for Luna since 2019.

“Trading partner” made $1.28 billion after helping UST repeg

While the SEC did not bring any charges against Jump, sources say it is this company (one of the largest Terra whales at the time) that made over $1 billion from its LUNA trades. In particular, the trading firm secured a deal of a lifetime with Terraform Labs when it helped the de-pegging UST return to the $1.00 peg.

The SEC’s complaint relates to UST’s de-pegging in May 2021 – a year before it ultimately collapsed to zero. According to the charges, Kwon’s team secretly entered a deal with the US-based trading firm. The company ideally stepped in to buy LUNA at massive discounts, ultimately helping the stablecoin regain its dollar parity.

But Terra misled the public by presenting the re-pegging as a result of the stablecoin’s software algorithm, when in reality it was due to the efforts of a third party – essentially human effort.

Terraform then allowed the trading firm to buy LUNA tokens for as low as 40 cents at a time the tokens traded at $90 across the secondary market. According to the sources, it was a deal that saw the “identified” US trading partner make a cool $1.28 billion in profit.

Do Kwon is in hiding following the Terra collapse and the latest reports claim he is in Serbia. As CoinJournal highlighted on Friday, the Terraform Labs founder is reported to have cashed out over $100 million worth of Bitcoin through an account at a Swiss bank.

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