A class action lawsuit alleges Jump Trading made $1.3 billion by manipulating the price of LUNA-UST.
Jump Trading is accused of supporting and abetting a fraud scheme involving Terra, resulting in financial losses of at least $40 billion for investors who put their money in cryptocurrencies. related death, according to the class action.
Starting around November 2019, negotiations between Do Kwon and Jump Trading are said to have resulted in a series of deals.
As part of this, Terraform Labs loaned Jump Trading 30 million LUNA, allowing Jump to become the Market Maker of LUNA and UST, according to the lawsuit. In return, Jump is entitled to compensation, including receiving LUNA at a substantial discount.
Then, the value of UST experienced an unexpected drop and fell below $1 on May 19, 2021, down 10% about a year before Terra’s concussion explosion.
The lawsuit alleges that shortly thereafter, on May 23, 2021, Do Kwon and Jump Trading conspired to artificially inflate the price of UST and aUST (a token used on Terra’s lending platform, Anchor).
The lawsuit further states that from May 23 to May 27, 2021, Jump Trading engaged in substantial net purchases of over 62 million UST tokens. These transactions are executed on multiple cryptocurrency trading platforms to conceal Jump’s manipulative actions.
To compensate Jump for manipulating UST and aUST, Terraform Labs has agreed to transfer 61.4 million LUNA to Jump at a fixed price of $0.4 per LUNA token under an agreement signed in July/September. 2021. This agreement will be effective for the next four years, regardless of LUNA’s actual market value.
As a result of this scheme, Jump is said to have made a staggering profit of over $1.28 billion by selling highly discounted LUNA tokens that they acquired through the corrected deal. change.
Up to now, a spokesperson for Jump Trading has not yet responded to this lawsuit.