A federal judge has accepted materials from Jump Crypto Holdings in discovery for the United States Securities and Exchange Commission (SEC) case against Terraform Labs.
In a Nov. 28 filing in U.S. District Court for the Southern District of New York, Judge Jed Rakoff approved the confidential treatment of certain materials produced by Jump Crypto Holdings, the crypto arm of Jump Trading. The firm was reportedly under scrutiny from the SEC for its alleged involvement in the events leading to the depegging of TerraUSD (UST) and the downfall of Terra — one of the major events kicking off the crypto market downturn of 2022.
“[T]he Court retains discretion to make public any confidential materials in connection with future motion practice or trial,” said the filing. “If such disclosure is contemplated, the Court will provide prior notice to counsel for Jump so that counsel may be heard on any objections.”
Before Terra’s collapse, Jump Crypto played a significant role in the firm’s ecosystem, participating in funding rounds supposedly to establish a UST reserve. Investors filed a lawsuit against Jump Trading in May, alleging the firm and its CEO, Kanav Kariya, manipulated the price of UST to gain roughly $1.3 billion in profits.
Related: Jump Trading seeks to move Terra class-action lawsuit to California
In February, the SEC charged Terraform Labs and co-founder Do Kwon for allegedly “orchestrating a multi-billion dollar crypto asset securities fraud.” The case was still ongoing at the time of publication, but both the SEC and Kwon and Terraform Labs filed motions for summary judgment in October.
Authorities in Montenegro arrested Kwon in June for using falsified travel documents, later sentencing the Terraform co-founder to four months in prison. On Nov. 24, a Montenegrin court approved Kwon’s extradition subject to approval by the minister of justice, meaning he may be sent to either the United States or South Korea to face charges.
Magazine: Terra collapsed because it used hubris for collateral — Knifefight
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Author: Turner Wright