A U.S. federal judge has granted approval for the inclusion of documents from Jump Crypto Holdings in the ongoing Securities and Exchange Commission (SEC) lawsuit against Terraform Labs.
On Nov. 28, Judge Jed Rakoff of the U.S. District Court for the Southern District of New York sanctioned the confidential treatment of specific materials provided by Jump Crypto Holdings, the cryptocurrency division of Jump Trading. This decision comes amidst the SEC’s investigation into Jump Crypto’s purported involvement in the events that led to the destabilization of TerraUSD (UST) and the subsequent collapse of the Terra ecosystem. This incident was a significant factor in the cryptocurrency market downturn in 2022.
The court’s filing stated that while these materials are treated confidentially, the court reserves the right to make them public in relation to future motions or trials. The court will notify Jump Crypto’s counsel in advance of any such disclosure, allowing them to raise objections.
Prior to the downfall of Terra, Jump Crypto was a key player in Terra’s ecosystem, reportedly participating in funding rounds aimed at creating a UST reserve. In May, investors sued Jump Trading and its CEO, Kanav Kariya, accusing them of manipulating UST’s price to secure approximately $1.3 billion in profits.
In a separate but related development, the SEC in February charged Terraform Labs and its co-founder Do Kwon with conducting a multi-billion dollar crypto asset securities fraud. As of the latest updates, the case was still active, with both the SEC and Kwon and Terraform Labs submitting motions for summary judgment in October.
Do Kwon faced legal troubles beyond the SEC case. In June, authorities in Montenegro arrested him for using forged travel documents. He was subsequently sentenced to a four-month prison term. On Nov. 24, a Montenegrin court ruled in favor of Kwon’s extradition, pending approval from the justice minister. This ruling means Kwon could potentially be extradited to either the United States or South Korea to face charges.
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