According to the SEC’s lawsuit against Do Kwon and Terra, a certain unidentified U.S. trading business had an exclusive arrangement with Terraform Laboratories and took away $1.28 billion in earnings. This information comes from the SEC’s investigation into Do Kwon and Terra.
The Securities and Exchange Commission filed a lawsuit against Terraform Labs and Do Kwon two days ago for promoting and selling TerraUSD (UST) as a “yield-bearing” stablecoin. In the complaint, a third party is alleged to have taken a significant portion of the income made by the Terra environment.
The complaint alleges that Kwon made false statements about the role that the UST algorithm had in assisting Terra in regaining its peg with the U.S. dollar after losing it during a crash in May 2021, one year before to Terra’s collapse.
According to the SEC’s allegations, Kwon “secretly discussed arrangements with a third party” to acquire a significant portion of UST in order to artificially inflate its price. Despite this, Kwon bragged that there had been no influence from humans in the ensuing events.
According to the complaint filed with the SEC, the firm only paid $62 million in order to maintain the price of UST near to $1 in May 2021. But, the corporation profited $1.28 billion by selling off tokens at a discount that it had acquired in compliance with its contract with Terraform Labs.
According to the SEC, the terms of the contract stated that Jump Crypto was periodically permitted to acquire LUNA for 40 cents while it was going for $90 on the open market in return for market making. This was despite the fact that LUNA was trading for $90 on the open market.
According to the SEC, following this occurrence, Terra altered its arrangement with the firm and lowered the standards it needed to satisfy in order to get reduced tokens. This adjustment was made after the incident that occurred.
The SEC has not yet brought any charges against Jump Crypto, nor has the company been accused of engaging in any unlawful actions. There has been no response from the firm to these charges as of yet.
Compiled by Coinbold