Alleged TerraUSD Price Manipulation Results in $1.3B Lawsuit Against Jump Trading
Jump Trading has been sued for conspiring to manipulate the price of TerraUSD (UST) following the stablecoin’s unprecedented collapse.
New Jersey-based resident Taewoo Kim has filed the lawsuit on behalf of affected investors, alleging that Jump Trading acquired substantial quantities of UST to manipulate its value toward $1, misleading investors about its true price and risks associated with the token.
The lawsuit claimed that the Chicago trading giant joined hands with Terraform Lab’s then-CEO Do Kwon to drive up the price of UST.
It also noted that Jump Trading was an early partner and financial supporter of Terraform Labs.
"Rather than publicly acknowledging the inability of TFL’s algorithm to maintain UST’s advertised peg price, TFL, and Kwon secretly schemed with Defendant Jump to manipulate the market prices for UST and aUST by making secret, coordinated trades to prop up UST to its $1 peg."
Specifically, the lawsuit said that Jump Trading purchased more than 62 million tokens from May 23 to May 27, 2021.
The purchases were made across several crypto exchanges to hide its manipulative actions better, according to the filing.
The plaintiff is accusing Jump and its CEO Kanav Kariya of violating both the Commodity Exchange Act and the Commodity Futures Trading Commission (CFTC) regulations, as well as common law unjust enrichment.
As a result of the scheme, Jump reportedly made a staggering profit of more than $1.28 billion by selling the heavily discounted LUNA tokens it had acquired through the modified agreement.
“Plaintiff’s allegations are based upon personal knowledge as to himself and his own acts, and upon information and belief as to all other matters based on the investigation conducted by and through Plaintiff’s
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