- The newest courtroom submitting by the SEC has revealed a secret deal between Leap Buying and selling and Terraform Labs in 2021.
- The high-frequency buying and selling agency reportedly remodeled $1 billion by propping up TerraUSD after it misplaced its greenback peg in Might 2021.
The U.S. Securities and Trade Fee has taken intention at Leap Buying and selling with its newest submitting within the U.S. District Court docket for the Southern District of New York. The securities regulator has highlighted an alleged deal between the Chicago based mostly high-frequency quantitative buying and selling agency and Do Kwon’s Terraform Labs, which concerned manipulation of the TerraUSD [UST] stablecoin.
Leap Buying and selling helped TerraUSD get better in 2021
As per a report by the Wall Avenue Journal, the courtroom filings made by the Securities and Trade Fee final week revealed that Leap Buying and selling entered a secret take care of Terraform Labs after the latter’s TerraUSD stablecoin misplaced its peg to the US Greenback and dropped under the $1 mark in Might 2021. Following the de-pegging, Leap Buying and selling agreed to buy large quantities of UST to be able to pump its worth and restore the greenback peg.
After UST regained its peg, Do Kwon and Terraform Labs touted their stablecoin’s underlying algorithm, which displayed “self-heal(ing)” traits. Kwon didn’t open up to buyers the function that Leap Buying and selling performed in propping up his TerraUSD stablecoin.
As a part of this secret deal, Do Kwon’s agency allowed the buying and selling agency to buy its LUNA token for as little as 30 cents when it was buying and selling at effectively over $10. In keeping with the SEC, Leap Buying and selling made greater than $1 billion from its enterprise dealings with Terraform Labs.
The SEC’s submitting confirmed rumors about Leap Buying and selling’s proximity to Do Kwon and its involvement in Terraform Labs’ operations earlier than it crashed in Might final yr. Legal professionals representing Terraform Labs and Kwon have requested the courtroom to dismiss the regulator’s lawsuit, citing an overreach of jurisdiction.
The legal professionals additionally argued that the transactions arising from Terra’s secret take care of Leap Buying and selling accounted for six% of the full UST purchases that contributed to the stablecoin’s re-peg.