Jump Trading’s Covert Operations: How They Made $1.28 Billion From Terra Labs’ Downfall
16 Maio 2023 - 8:30PM
NEWSBTC
According to recent court filings by the Securities and Exchange
Commission (SEC), the Chicago-based firm Jump Trading LLC secretly
propped up Terra (UST), the algorithmic stablecoin created by Do
Kwon, a year before its eventual collapse. The Wall Street Journal
reported on the findings, revealing that Jump Trading made a
staggering $1.28 billion from the scheme. Jump Trading is a
Chicago-based global trading firm specializing in various financial
products, including equities, futures, options, currencies, and
cryptocurrencies. The company was founded in 1999 by a group of
former pit traders and has since grown to become one of the largest
trading firms in the world, with offices in Chicago, New York,
London, Singapore, and Shanghai. Related Reading: Why Litecoin Is
The Most Undervalued Asset in Crypto The Dark Side Of Terra’s
Collapse The court filings shed light on the covert operations of
Jump Trading, which allegedly used its trading power to prop up the
UST project without any public disclosure. The stablecoin’s peg was
artificially maintained, leading to a prolonged “Ponzi scheme” that
eventually led to its downfall. The filings also reveal the
role of Do Kwon, the founder of Terra and UST, in the scheme. Kwon
is accused of falsely claiming the project’s stability and
performance, leading investors to pour money into the project.
According to the Wall Street Journal, Kwon allegedly used the funds
to prop up the UST peg, prolonging the Ponzi scheme and allowing
Jump Trading to profit massively. Furthermore, the
Chicago-based firm allegedly purchased over 62 million stablecoin
tokens, pushing its price back to $1 and propping up the Ponzi
scheme. The revelations raise questions about the transparency and
integrity of the UST project. Terra Labs And Jump Trading Under
Scrutiny Per the report, after the stablecoin’s recovery, Do Kwon
touted the algorithm’s “self-healing” abilities and its ability to
maintain a dollar peg through a code-enabled balancing act with
sister cryptocurrency Luna. However, the court filings suggest that
the recovery was due to Jump Trading’s covert operations rather
than the algorithm’s inherent stability. The report reveals that
Jump Trading had a three-year loan agreement with Terraform Labs
for 30 million Luna tokens with a 2% annualized interest payable in
Luna tokens. The loan agreement was part of a larger deal that saw
Terraform Labs receive a multimillion-dollar cash injection from
Jump Trading in exchange for allowing the firm to buy Luna tokens
for 30, 40, and 50 cents over three years. The court filings
also include an email from Kwon to investors, in which he states
that Terraform Labs had made an “important arrangement” with Jump
Trading and asked investors to keep quiet about it. The revelations
raise serious questions about the transparency and integrity of the
UST project and the crypto industry. Furthermore, Jump Trading has
not been accused of wrongdoing about the UST project, although the
firm is facing a class action lawsuit from an investor over its
alleged role in propping up the stablecoin. The company has not
commented on the allegations. Related Reading: Shiba Inu Event
Raises The Bar With A 26,000% Surge In 24-Hour Burn Rate Featured
image from Unsplash, a chart from TradingView.com
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