Jump Crypto CEO Under Investigation For Alleged Secret Deal Amid TerraUSD Collapse
The SEC is investigating whether Kanav Kariya, the former Jump Crypto CEO, entered into a secret agreement with Do Kwon, the president of Terraform Labs, during the collapse of the stablecoin TerraUSD.
The investigation focuses on Jump Crypto‘s involvement in helping to restore UST’s peg by purchasing tokens. The SEC has alleged that Kwon engaged in a fraudulent scheme worth $40 billion through unregistered securities LUNA and UST.
According to a deposition by SEC counsel Devon Staren, it is suggested that Kariya and Kwon made a deal on May 23, 2021, after UST had depegged. UST, Kwons algorithmic stablecoin, experienced a significant drop in value from around $1 to approximately $0.30 cents on May 9, 2021, and LUNA, the token intended to stabilize UST, plummeted by around 99% by May 12, 2021.
Alleged Agreement Terms and Jump Crypto CEOs Response
Staren‘s questioning revealed that the terms of the alleged agreement were for Jump to help restore UST’s peg by purchasing the token, and in return, Kwon would amend Jumps LUNA loan agreement and lift the vesting conditions. However, Kariya invoked his right to resist self-incrimination and declined to answer the question during the deposition.
These allegations align with a civil class action suit filed against Jump Crypto, accusing them of manipulating the price of UST and AnchorUST between May 23, 2021, and May 31, 2022. The lawsuit claims that Kwon agreed to modify prior agreements and provide Jump with over 61.4 million LUNA tokens at a significant discount, which Jump later sold for a profit of over $1.28 billion.
In the ongoing SEC case against Terraform Labs, both parties have motioned for a summary judgment. The defense argues that the SEC has not sufficiently proven Kwons violation of securities laws, while the SEC contends that token holders were clearly making an investment.
Disclaimer:
The views in this article only represent the author's personal views, and do not constitute investment advice on this platform. This platform does not guarantee the accuracy, completeness and timeliness of the information in the article, and will not be liable for any loss caused by the use of or reliance on the information in the article.
South Korea: Upbit Investigated for Over 500,000 KYC Violations
MacBook Users with Intel Chips Urged to Update for Enhanced Security
Solana-Based Trading Terminal DEXX Hacked, Over $21M in User Losses
South Korea to Enforce 20% Crypto Tax in 2025 with Increased Exemption Limit
0.00