- Jump Crypto is reportedly the unidentified US trading firm” the SEC says helped re-peg TerraUSD in 2021.
- Terraform Labs and its CEO Do Kwon misrepresented the human effort as a software algorithm.
- Jump was able to buy Luna tokens at massive discounts leading to a profit of over $1.28 billion, though the SEC has filed a wrongdoing charge against the trading firm.
When the US Securities and Exchange Commission (SEC) sued Terraform Labs and its CEO Do Kwon, it pointed to an unnamed US-based trading firm as having realized massive profits from deals with Terra (LUNA).
Now sources say that firm is Jump Crypto, a Chicago-based subsidiary of Jump Trading, according to a report first shared by crypto publication The Block. Per the report, it is Jump Crypto that helped TerraUSD (UST) – an algorithmic stablecoin launched by Do Kwon – regain its peg in 2021.
Do Kwon’s Terra project collapsed in May 2022, while Jump had been providing market making services for Luna since 2019.
“Trading partner” made $1.28 billion after helping UST repeg
While the SEC did not bring any charges against Jump, sources say it is this company (one of the largest Terra whales at the time) that made over $1 billion from its LUNA trades. In particular, the trading firm secured a deal of a lifetime with Terraform Labs when it helped the de-pegging UST return to the $1.00 peg.
The SEC’s complaint relates to UST’s de-pegging in May 2021 – a year before it ultimately collapsed to zero. According to the charges, Kwon’s team secretly entered a deal with the US-based trading firm. The company ideally stepped in to buy LUNA at massive discounts, ultimately helping the stablecoin regain its dollar parity.
But Terra misled the public by presenting the re-pegging as a result of the stablecoin’s software algorithm, when in reality it was due to the efforts of a third party – essentially human effort.
Terraform then allowed the trading firm to buy LUNA tokens for as low as 40 cents at a time the tokens traded at $90 across the secondary market. According to the sources, it was a deal that saw the “identified” US trading partner make a cool $1.28 billion in profit.
Do Kwon is in hiding following the Terra collapse and the latest reports claim he is in Serbia. As CoinJournal highlighted on Friday, the Terraform Labs founder is reported to have cashed out over $100 million worth of Bitcoin through an account at a Swiss bank.
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Financial trading firms are known for their shrewd investing strategies, and now one firm has managed to make an astonishing $1.28 billion in a single transaction. According to a recent report, US trading firm Jump Trading was responsible for this success through their purchase of the cryptocurrency token LUNA.
This return far surpasses the usual profits made in cryptocurrency trading, which stands as a testament to the expertise of the firm. Jump Trading is renowned in the crypto space for its swift trading, making deals in fractions of a second. Presented with the opportunity to buy LUNA in such quantities, the company pounced, realizing their immense potential profits.
LUNA was launched in the middle of 2020, quickly skyrocketing to a market value of almost $15 billion by the end of the year. Over the course of the next few months, that value continued to increase. As a result, Jump Trading saw the potential to make huge profits, launching a buyout of over 50% of LinkedIn’s new cryptocurrency.
Between 7 March and 20 March 2021, LUNA prices increased by 390%, allowing Jump Trading to reap the rewards of their illustrious investment. While Jump Trading’s total profits from LUNA remain unknown, the trading firm’s $1.28 billion return has stunned many in the industry.
The success of Jump Trading has prompted other firms to consider the merits of cryptocurrency tokens. Whereas the currency was initially considered volatile and speculative, this incredible profit has changed the attitude of trading firms, who now look to replicate Jump’s gains by seeking out opportunities in the markets.
Ultimately, Jump Trading’s success in the cryptocurrency industry is an extraordinary example of the potential rewards of careful investing. While making such impressive profits is rare in the markets, this trading firm’s savvy strategy serves as a reminder of the scale of rewards available to those willing to take the risks.