U.S. high-speed trading giant Jump Trading entered a secret deal to prop up the TerraUSD cryptocurrency a year before the coin’s collapse, new court filings show, highlighting the ties between Chicago-based Jump and disgraced crypto mogul Do Kwon, the Wall Street Journal reported. The Securities and Exchange Commission posted the court filings late Friday as part of its fraud lawsuit against Mr. Kwon and his company, Terraform Labs. The filings confirm that Jump was the unnamed U.S. trading firm in the SEC’s lawsuit that made some $1 billion in profit through its dealings with Terraform Labs, according to the SEC. Jump hasn’t been accused of any wrongdoing in connection with TerraUSD or the coin’s May 2022 collapse. The crash wiped out some $40 billion in value from the crypto markets and cost thousands of investors their savings. One year before the collapse, in May 2021, the stablecoin TerraUSD fell below its $1 peg to nearly 90 cents before staging a recovery. Mr. Kwon later touted the rebound as an example of how TerraUSD “automatically self-heals,” bolstering investors’ belief that the algorithmic mechanism behind TerraUSD would keep it tied to the dollar, the SEC said in its February lawsuit.
