Jump Trading accused of buying over 62M UST tokens to inflate its price.

Jump Trading Group’s crypto division has been sued for conspiring with Terraform Labs to manipulate TerraUSD’s (UST) price following the stablecoin’s unprecedented collapse. The $1.3 billion class-action lawsuit alleges that Jump bought 62 million UST tokens to propel its price back up.

Jump Trading Allegedly Bought UST to Recover its Dollar Peg

Jump Trading, a US-based firm focused on algorithmic and high-frequency trading strategies, is facing a $1.3 billion class-action lawsuit over allegations that it had manipulated the price of the collapsed UST token. The lawsuit was filed on behalf of affected investors by Taewoo Kim, a New Jersey resident who claims that Jump Trading was also an early partner of Terraform Labs, the blockchain project behind UST.

In the lawsuit, Kim alleges that shortly after the UST collapse in May 2021, Jump Trading and Terraform Lab’s then-CEO Do Kwon conspired to manipulate the prices of UST and aUST stablecoins artificially. To achieve this, Jump bought UST tokens, temporarily restoring UST’s price to the $1 peg, which previously dropped to as low as 12 cents.

Specifically, the lawsuit states that from May 23 to May 27, 2021, Jump Trading acquired more than 62 million tokens. The purchases were made across several crypto exchanges to hide its manipulative actions better, Kim says in the document.

In addition, Kwon’s Terraform Labs then agreed to transfer 61.4 million LUNA tokens to Jump at a fixed price of $0.40 per coin under the terms of an agreement signed in July 2021. The deal was supposed to remain in effect for the following four years without regard to LUNA’s actual market price.

source: tokenist

image source: ai

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