@zGuz: Do Kwon and Terra vs. The SEC ...


Do Kwon and Terra vs. The SEC Day 6 Full Morning Recap:

Today featured expert witness testimony from Rutgers professor Bruce Mizrach to walk through the impact of Jump’s intervention in the 2021 de-peg

“Had it not been for Jump… the peg would not have been restored.” 🧵


Again, as I’ve highlighted, in order to find Do Kwon and Terra culpable for fraud in this trial, the SEC is attempting to show the jury that both parties misled investors by assuring them UST was designed to correct in value to a price of $1

Prof. Mizrach began his testimony…

He’s a professor who specializes in market structure and walks the jury through the function of an order book

Interestingly, this guy is making $1,000 an hour for being here.

SEC is shelling out for these expert witnesses.

He also walks through the prospect of onchain swaps for UST/LUNA and why most of the time that arbitrage opportunity might not be profitable for average users

That sets up the need for market makers to help stabilize UST’s price outside of this algorithmic function

Through the trial, the original agreement between Terra and Jump has come up.

Jump acquired the right to purchase 65M LUNA tokens at a price of $0.40

Before the depeg in 2021 struck, Jump had only received 3.5M LUNA of the 65M

Clearly they had an incentive to save UST

That would explain why we’ve already heard testimony that Jump was prepared to spend $200M buying up UST to help support the peg

But is that enough for the jury to side with the SEC that not sharing that detail = fraud?

Professor Mizrach: “Had it not been for Jump’s trading, the peg would not have been restored and [would’ve] traded close to $0.”


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