CDS Crypto News Jump Crypto CEO Faces Investigation Over Suspected Covert Agreement Amid TerraUSD Decline
Crypto News

Jump Crypto CEO Faces Investigation Over Suspected Covert Agreement Amid TerraUSD Decline

The SEC is delving into the possibility of a clandestine pact between ex-Jump Crypto CEO Kanav Kariya and Terraform Labs' Do Kwon amid the turmoil of the TerraUSD stablecoin.

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Jump Crypto CEO Faces Investigation Over Suspected Covert Agreement Amid TerraUSD Decline

Crypto News- Investigators are honing in on Jump Crypto’s role in the UST saga, accusing CEO Kwon of orchestrating a clandestine $40 billion deal involving unregistered securities LUNA and UST.

Jump Crypto CEO Faces Investigation Over Suspected Covert Agreement Amid TerraUSD Decline

SEC counsel Devon Staren’s deposition suggests a pivotal agreement between Kariya and Kwon on May 23, 2021, post UST’s detachment. UST, Kwon’s algorithmic stablecoin, had nosedived from $1 to roughly $0.30 on May 9, 2021, while LUNA, meant to steady UST, had plummeted by 99% by May 12, 2021.

Jump Crypto CEO Faces Investigation Over Suspected Covert Agreement Amid TerraUSD Decline

The alleged deal’s terms, as per Staren’s interrogation, involved Jump aiding UST’s recovery by acquiring tokens. In return, Kwon would modify Jump’s LUNA loan agreement and remove vesting conditions. However, Kariya, invoking self-incrimination, stayed mum during the deposition.

These accusations echo a civil class action against Jump Crypto, accusing them of manipulating UST and AnchorUST prices from May 23, 2021, to May 31, 2022. The suit alleges Kwon altered agreements, granting Jump a hefty 61.4 million LUNA tokens at a steep discount, eventually sold for a $1.28 billion profit.

In the ongoing SEC case against Terraform Labs, both sides seek a summary judgment. The defense argues insufficient proof of Kwon’s securities law breach, while the SEC asserts token holders were unequivocally making investments.

Jump Crypto CEO Faces Investigation Over Suspected Covert Agreement Amid TerraUSD Decline
Sources:coincu

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