Jump Crypto, a segment of the Jump Trading group, is currently facing scrutiny from the US Securities and Exchange Commission (SEC) for its alleged involvement in transactions with former Terraform Labs CEO Do Kwon.
Reporting from Yahoo Finance, written on Sunday (12/11/2023), the SEC investigation is focused on whether Jump Crypto entered into an agreement in May 2021 to stabilize the Terra USD (UST) peg against the US dollar by acquiring large amounts of algorithmic stablecoins.
During a recent statement, Kanav Kariya, President of Jump Crypto, chose to assert the fifth amendment, refusing to respond to questions regarding the arrangement.
Excerpts from the statement, shared by an informant from Terra known as FatMan, reveal an active SEC investigation into the matter.
Previous reports in February identified Jump as the undisclosed trading company cited in the SEC’s indictment against Terraform Labs and Do Kwon.
The purported market-making agreement allows Jump to generate profits of more than USD 1 billion or the equivalent of IDR 15.6 trillion (assuming an exchange rate of IDR 15,694 per US dollar) by acquiring heavily discounted LUNA (now LUNC) tokens to support the value of UST.
Jump allegedly bought LUNA for USD 0.40 or the equivalent of IDR 6,277 when its market value exceeded USD 90 or the equivalent of IDR 1.4 million per token. Jump Crypto plays an important role in the Terra ecosystem, participating in governance proposals and investing in cross-chain bridges.
Kanav Kariya also serves on the board of the Luna Foundation Guard (LFG), overseeing Terra’s reserves. The SEC investigation raises concerns about potential misconduct within the Terra ecosystem and broader implications for Jump Crypto’s activities in the cryptocurrency market.
