Jump Crypto president pleads the Fifth when asked about alleged Do Kwon bribe

In a deposition part of the SEC’s civil suit against Terraform Labs, Jump Crypto president Kanav Kariya avoids answering questions about an alleged back-door deal


Lanevskyi/Shutterstock modified by Blockworks


The US Securities and Exchange Commission has probed whether the president of Jump Crypto engaged in a secret agreement with Terraform Labs’ Do Kwon in the midst of stablecoin TerraUSD’s collapse. 

SEC counsel Devon Staren deposed Jump Crypto president Kanav Kariya in August as part of the securities regulator’s ongoing civil suit against Terraform Labs. The SEC alleges Kwon “perpetuated a fraudulent scheme,” to the tune of $40 billion, through unregistered securities LUNA and UST. 

In a portion of Kariya’s deposition unsealed late last month, Staren suggested that Kwon and Kariya penned a deal on May 23, 2021, weeks after UST had depegged. 

UST, Kwon’s algorithmic stablecoin, fell from around $1 to around $0.30 cents on May 9, 2021. By May 12, 2021, LUNA, the token intended to stabilize UST, had plummeted around 99%. 

Read more: Just in time: SEC charges Do Kwon, Terraform Labs with fraud

The terms, per Staren’s questioning, were that Jump would help restore UST’s peg by purchasing the token — and in exchange Kwon would allegedly amend Jump’s LUNA loan agreement and lift the vesting conditions. 

“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?” Staren asked. 

Kariya invoked his right to resist self-incrimination in his response, as he did eight other times in the unsealed section of the deposition. 

“On the instruction of counsel I exercise my rights under the Fifth Amendment and decline to answer the question at this time,” Kariya repeated during the deposition, which occurred on Aug. 18 and was filed with the court on Oct. 28. 

Read more: Terraform, Do Kwon lawyers get creative, try to use Ripple ruling to dismiss their own suit

Staren’s line of questioning appears to hint at similar allegations made in a civil class action suit filed against Jump Crypto for allegedly manipulating the price of UST and AnchorUST between May 23, 2021 and May 31, 2022. Anchor is a lending platform built on Terra where UST holders can earn yields on their tokens. 

Plaintiffs filed the class action in an Illinois federal court in May, citing billions of dollars in alleged losses. 

“To incentivize and reward Jump for its manipulation of the markets for UST and aUST [Terraform Labs]…and Kwon agreed to modify the parties’ prior agreements and instead unconditionally convey to Jump more than 61.4 million LUNA tokens at a greater than 99% discount from their then-current market price,” the class action lawsuit complaint stated at the time. “Jump later resold those LUNA tokens into the market at a staggering profit of over $1.28 billion.” 

A representative for Kariya did not return Blockworks’ request for comment.

In the SEC’s case against Terraform Labs, both parties have motioned for a summary judgment. The defense argues that the SEC has not sufficiently proven that Kwon violated securities laws and the SEC countered that token holders were “clearly” making an investment.

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