Recently unsealed documents reveal that Jump Crypto president Kanav Kariya pled the Fifth when asked about an alleged backdoor bribe made with Terraform Labs founder Do Kwon back in 2021, in an attempt to re-peg stablecoin TerraUSD (UST).
According to the SEC, Kariya and now-imprisoned Kwon agreed in May 2021 that Jump Crypto would manipulate the price of UST in exchange for amendments to the terms of Jump’s LUNA loan agreement. In February, sources familiar with the case told reporters that Jump Crypto made $1.28 billion dollars in profit from Kwon’s now-decimated crypto empire.
“And when you asked Do Kwon to lift the vesting conditions in exchange for Jump’s agreement to buy up UST to restore the peg, Do Kwon agreed to that, correct?” SEC counsel Devon Staren asked Kariya in court on August 18.
“On the instruction of counsel I exercise my rights under the Fifth Amendment and decline to answer the question at this time,” Kariya replied (via Blockworks). The Jump Crypto president pled the Fifth a total of nine times, according to his recently unsealed deposition.
The SEC’s ongoing case against Kwon and Terraform Labs alleges that they violated securities laws and defrauded investors. Both the SEC and the defense have filed for summary judgement — while Kwon’s lawyers believe the case should forego a trial by jury because the SEC has failed to prove its clients broke the law, the commission has asked for swift judgement because the alleged fraud and sale of securities is “clear, undisputed, and overwhelming.”
Kariya was deposed at the end of August for his alleged involvement. Kwon was a fugitive until his arrest in Montenegro, where he is currently serving time in prison after local courts found him guilty of document forgery. He awaits extradition.