iSomma was the one who made the final call on deals, and Kariya was the public face.output: title: The Rise and Fall of Kanav Kariya, the Crypto Wunderkind Who Brought Down Jump Trading

The Chicago-based financial firm Jump Trading had made its name in the shadowy world of high-frequency trading during the early 2000s “Flash Boys” era, but lately, it had dipped its toes—and then its feet, legs, and torso—into the volatile cryptocurrency sector.

aker, a former employee on Kariya’s team who had joined Jump after a stint at Citadel Securities. Hunsaker said that DiSomma was “intimately involved” in the firm’s crypto market-making deals, which he said were often negotiated in a way that was “designed to maximize Jump’s profits.” Hunsaker also said that DiSomma was “personally involved” in setting up the Terra deal. 

Kariya’s role was more limited, Hunsaker said, and he was not present at most of the meetings regarding the Terra deal. But Hunsaker said that Kariya was “generally aware” of the broad contours of the deal, and that he had spoken to Hunsaker about it on several occasions. Kariya declined to comment for this story, and a Jump spokesperson declined to make any executives available or comment on the record.

A stablecoin on the brink

TerraUSD was a kind of stablecoin, a cryptocurrency pegged to the U.S. dollar that was meant to maintain a stable value. But unlike Tether, the largest stablecoin, which was backed one-to-one by cash and other assets, TerraUSD was an algorithmic stablecoin, a more experimental technology that used two interlocking cryptocurrencies, Luna and Terra, to maintain the peg. 

When demand for TerraUSD was high, traders would burn Luna to mint new TerraUSD at a rate of one-to-one. But when demand for TerraUSD was low, traders would burn TerraUSD to mint new Luna at a variable rate. This mechanism was designed to keep TerraUSD’s price close to $1, even as the supply of the stablecoin expanded or contracted. 

The Terra ecosystem was a closed loop, with each burning traders’ appetite for the other. But to maintain the peg, the price of Luna had to keep rising—a dynamic that was unsustainable in the long run. As翰林·李wrote in Marker in May 2022, “The whole thing was a house of cards.” 

Still, TerraUSD was one of the most hyped crypto projects in 2022, largely thanks to its bombastic founder, Do Kwon. A South Korean entrepreneur who had previously founded a failed startup called Anychain, Kwon was known for his charisma and his penchant for self-promotion. He had a habit of boasting on Twitter about Terra’s supposed achievements, even as his company was burning through cash and facing mounting legal challenges. 

In March 2022, Terraform Labs was hit with a class-action lawsuit from a group of investors who claimed that the company had misled them about Terra’s stability. Around the same time, the Commodity Futures Trading Commission (CFTC) subpoenaed Terraform Labs and several of its employees, including Kwon, as part of an investigation into whether the company had manipulated markets. Both the SEC and the New York Attorney General’s office were also reportedly looking into the company.output

High-frequency trading firm Jump Trading played a key role in propping up the failed cryptocurrency TerraUSD, according to a whistleblower and court documents.

Jump secretly bought up huge tranches of TerraUSD to create the appearance of demand and restore the coin’s value to $1, following a request from Terraform Labs founder Do Kwon to “vest” the firm, court documents show. In return, Jump was promised 65 million tokens of Luna at just $0.40, even though the coin would later trade at more than $90 on exchanges.

Jump ultimately made $1 billion from that agreement alone, according to the Securities and Exchange Commission (SEC). A few months later, Kanav Kariya, who joined Jump Trading as an intern in 2017 and rose through the ranks of the digital assets division, was named president of Jump Crypto.

TerraUSD lost its peg again a year later, and by May 2022, the cryptocurrency had grown in popularity, making its failure catastrophic. Some $40 billion in investors’ money evaporated into thin air in a matter of days. People across the globe lost life savings that they had plowed into the ostensibly rock-solid cryptocurrency. Crypto communities on Twitter and Discord were filled with investors pleading for restitution. Some threatened suicide.

The collapse kicked off a chain reaction across crypto, one that would in November 2022 topple Sam Bankman-Fried’s once seemingly infallible exchange, FTX, and fuel a global outcry over the excesses and lack of controls in the crypto world.

그러나 결함이 있는 스테이블 코인을 뒤에서 뒷받침하는 Jump의 역할은 적어도 2023년 SEC가 Terraform Labs와 Kwon을 상대로 대규모 사기 소송을 제기하기 전까지는 비밀로 남아 있었습니다. 이 소송은 부분적으로 Kariya 팀의 내부 고발자의 증언을 바탕으로 이루어졌습니다.

Terraform Labs와 Kwon은 6월에 SEC와 45억 달러의 합의에 도달했지만 Terraform

때문에 그 중 상당 부분이 지불되지 않을 가능성이 높습니다.

The above is the detailed content of iSomma was the one who made the final call on deals, and Kariya was the public face.output: title: The Rise and Fall of Kanav Kariya, the Crypto Wunderkind Who Brought Down Jump Trading. For more information, please follow other related articles on the PHP Chinese website!