Jump Trading Allegedly Profited $1.3 Billion From Price Manipulation TerraUSD
A lawsuit has been filed in Illinois district court alleging that Jump Trading engaged in price manipulation of TerraUSD (UST), an algorithmic stablecoin, through a partnership with Terraform Labs. According to court documents, Jump Trading purchased millions of UST tokens in 2021 to manipulate their value to reach $1, violating the Commodity Exchange Act and CFTC regulations. The lawsuit also accuses Jump of getting rich illegally.
Specifically, in May 2021, when the UST stablecoin algorithm failed to maintain a fixed $1, Terraform and its CEO Do Kwon allegedly coordinated transactions with Jump to manipulate the market price for UST and aUST. To encourage Jump manipulation, Terra and Kwon agreed to amend their previous agreements and transfer over 61.4 million LUNA tokens to Jump at a high discount. Jump later sold back with a profit of more than 1.28 billion USD. Jump is the leading financial backer of Terraform Labs and has borrowed tens of millions of LUNA tokens in exchange for market-making services for transactions in LUNA, UST, and aUST.
Source
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