Jump Crypto President Pleads The Fifth When Asked About Alleged Backdoor Deal With Do Kwon

Kanav Kariya, president of quantitative trading firm Jump Crypto, has pleaded the Fifth Amendment when asked in court about his alleged backdoor deal with Terraform Labs CEO Do Kwon.

The U.S. Securities and Exchange Commission (SEC) conducted an investigation on whether the Jump Crypto president was involved in a secret agreement with Kwon during the controversial implosion of the Terra ecosystem that wiped billions of dollars in investment in May 2021.

The alleged deal was suspected of helping stabilize the peg of so-called algorithmic stablecoin TerraUSD (UST) to the U.S. dollar in May 2021 by acquiring a significant number of UST.

Interestingly, in a portion of Kariya's deposition that was unsealed in October, the crypto executive chose to plead the Fifth Amendment and refused to answer SEC counsel Devon Staren when he fired questions related to the said arrangement.

Staren asked, "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?"

Kariya responded by invoking his right to resist self-incrimination, saying, "On the instruction of counsel I exercise my rights under the Fifth Amendment and decline to answer the question at this time."

Earlier reports claimed that Jump Crypto was the undisclosed trading firm the SEC cited in its indictment against Terraform Labs and Kwon.

It was believed that the secret agreement allowed Jump Crypto to rake in more than $1 billion in profit by acquiring especially priced LUNA, the native crypto asset of the Terra ecosystem.

Kwon and his blockchain firm Terraform Labs are facing a lawsuit filed by the U.S. SEC alleging that they violated securities law and defrauded investors.

Recently, the SEC asked the court for a summary judgment on the lawsuit while Kwon and Terraform Labs asked for its dismissal.

Earlier this month, Terraform Labs co-founder Daniel Shin denied any involvement in the spectacular collapse of Terra and blamed it on Kwon, the other co-founder and CEO of the firm.

"We parted ways with CEO Kwon for business purposes in 2020. The cause of the coin plunge was the unreasonable operation of the Anchor Protocol conducted by CEO Kwon and external attacks," Shin's lawyer said during the trial held at the Seoul Southern District Court. "[It] has nothing to do with CEO Shin."

Shin is facing trial for fraud, illegal fundraising and capital market law violation. He has denied all the charges made against him.