President of Jump Crypto, Kanav Kariya, pleaded his Fifth Amendment rights while being questioned by the U.S. Securities and Exchange Commission over an alleged hidden market-making scheme with Terraform Labs’ founder, Do Kwon, that saw his company pocket over $1 billion.
When asked by SEC counsel, Devon Staren, whether or not he made an agreement with Kwon to buy up massive amounts of UST in order to restore the token’s value, Kariya refused to elaborate and invoked his Fifth Amendment rights.
“Under instruction of counsel I exercise my rights under the Fifth Amendment to answer the question at this time,” Kariya said.
The deal, which saw Jump Crypto purchase large swaths of the token in exchange for an amendment to Jump’s LUNA loan agreement by lifting its vesting conditions, was established on May 23, 2021, nearly two weeks after UST and LUNA destabilized on May 9th and May 12th, respectively.
Reportedly, Jump purchased LUNA coins valued at $90 for just $0.40. Kariya, meanwhile, served as a member of the governing council for Luna Foundation Guard, which claimed to ensure “activities of the Foundation are aligned with promoting transparency, governance, advancing research and development in open and decentralized networks.”
Brought forward by the SEC in Manhattan federal court in February 2023, Kwon, along with his firm Terraform Labs Pte. Ltd., is currently facing a civil fraud lawsuit for misleading investors.
In the February complaint, the SEC alleged that Terraform and Kwon “perpetrated a fraudulent scheme that led to the loss of at least $40 billion of market value, including devastating losses for U.S. retail and institutional investors.”
Moreover, the SEC claims that “Kwon and Terraform repeatedly touted the
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