In a significant revelation, FatMan, a notable figure in the crypto community known for his critical stance on Terraform Labs and its founders, recently shared an update on the ongoing legal proceedings related to the Terra (LUNA) and UST collapse.
According to his post James Hunsaker, a former employee at Jump Trading, took the stand in the ongoing Terraform Labs trial. Hunsaker provided testimony regarding his whistleblower complaint filed with the SEC. This complaint outlined Jump Trading’s role in supporting Do Kwon’s UST algorithmic stablecoin, which ultimately led to its dramatic $40 billion collapse in 2022, as highlighted by FatMan.
Moreover, Hunsaker’s testimony underscores a significant development in unraveling the complexities behind one of the crypto world’s most significant scandals. Hunsaker disclosed that Jump Trading and Terraform Labs (TFL) had struck an “important deal” aimed at boosting UST adoption. However, when UST depegged in May 2021, an urgent strategy shift occurred.
Consequently, Jump Crypto’s president, Kanav Kariya, communicated a commitment from Do Kwon, leading to Bill DiSomma directing aggressive trading strategies to accumulate UST. This action was seen as a desperate bid to restore UST’s peg to the dollar, illustrating the lengths to which Jump was prepared to go to support Terra’s project.
Significantly, both Kariya and DiSomma invoked the Fifth Amendment during SEC depositions, highlighting the legal complexities surrounding the case. Additionally, the SEC’s investigation revealed that Jump’s trading activities not only restored UST’s peg temporarily but also led to a profit of around $1bn for the firm. This fact becomes crucial as it points to the alleged concealed role of Jump in the UST saga, which Terraform and Do Kwon supposedly masked, presenting the stablecoin’s recovery as a natural market correction.
Furthermore, Hunsaker’s involvement, including his investment in UST and subsequent actions to seek justice, adds a layer of depth to the narrative. His testimony not only sheds light on the internal dynamics at Jump and Terraform but also echoes the broader implications for investors misled by claims of UST’s stability. Hence, as the trial unfolds, Hunsaker’s revelations mark a pivotal moment in the pursuit of accountability and transparency within the volatile crypto market.
