5 C
New York
Monday, February 26, 2024

Lawsuit Filed Against Jump Trading Over Terra’s UST Price Manipulation

Must read

Lawsuit Filed Against Jump Trading Over Terra’s UST Price Manipulation

  • Taewoo Kim, a New Jersey citizen, filed the action on behalf of aggrieved investors.
  • According to the complaint, TFL engaged in these by lending 30M LUNA tokens to Jump.

A new class action lawsuit has been filed against Jump Trading, alleging that the company manipulated the price of the algorithmic stablecoin UST by buying large amounts of the token in an effort to drive its value closer to $1 while concealing this fact from investors.

According to the class action, investors who invested their money into Terra-related cryptocurrencies lost at least $40 billion because the Chicago trading behemoth aided and abetted a fraudulent scam.

Taewoo Kim, a New Jersey citizen, filed the action on behalf of aggrieved investors on May 9. Kim contends that Jump Trading was an early partner and financial backer of Terraform Labs. There were reportedly a number of deals reached between former Terraform CEO Do Kwon and Jump beginning in November 2019.

False Market Demand

According to the complaint, TFL engaged in these by lending 30 million LUNA tokens to Jump so that the latter may engage in market-making activities on behalf of LUNA and UST. In exchange, Jump claims it is owed compensation in the form of heavily discounted LUNA tokens.

On May 19, 2021, the value of UST unexpectedly dropped below $1, plummeting by 10%, around a year before Terra’s catastrophic collapse, when it plunged to zero.

The complaint claims that on May 23 of the same year, Kwon and Jump plotted to raise the price of UST and aUST (a token used on Terra’s lending platform, Anchor) by creating a false market demand for them. It is alleged that Jump did this by purchasing huge amounts of UST in secret, giving the impression once again that UST is pegged to the dollar.

More articles

0 0 votes
Article Rating
Subscribe
Notify of
guest
0 comments
Inline Feedbacks
View all comments

Latest News