After the US SEC charges against Terra project co-founder Do Kwon, a “Jump Trading” named company came to light which secured huge profits from the Terra (Luna) ecosystem.
Terraform labs is an engineering team behind Terra blockchain. Luna coin & TerraUSD stablecoin were two native tokens on the Terra blockchain network. TerraUSD & Luna were integrated via a protocol to maintain the value of each TerraUSD equal to $1 but in May 2022 both of these tokens plunged badly under a high volatility & pressure sell situation.
Just a day ago, The United States Securities and Exchange Commission (SEC) announced that the agency initiated a fraud charge against Terraform labs co-founder Do Kwon. The SEC alleged that the value of TerraUSD & Luna was not integrated via any protocol, instead, its project team was manipulating the price of Luna & maintaining the value of TerraUSD near $1. As per SEC allegations, the Terra project violated securities law because they were providing stablecoin & crypto tokens without real disclosure of financial position and also Terra team was misleading people with wrong financial data about their operations.
The SEC agency named “Jump Trading” as a third-party company in the price manipulation of Luna & TerraUSD. The SEC failed to disclose whether it charges against this company or not but few experts believe Jump Trading may all fall under the latest case initiated by the SEC agency against Terraform Labs.
A crypto news media team, TheBlock, reported that its investigation found that Jump Trading collected Luna coin at $0.4 but at that time Luna coin trade price was $90 in the secondary marketplace. Reportedly, Jump Trading was receiving those discount-priced Luna coins from the Terra project team directly and in return, Jump Trading was buying TerraUSD stablecoin, to maintain the price of TerraUSD equal to $1. The whole game was running since November 2019.
Before May 2022, Jump Trading generated $1.2 billion in revenue. According to experts’ point of view, such companies sold their Luna coin holdings in bulk and that was the reason behind the collapse of the Luna coin from $90 to below $ $0.0001.
Read also: Elon Musk seems interested in AI ChatBot “ChatGPT”
An unknown firm “Jump Trading” secured $1.28B before Terra’s collapse