Key takeaways:
- Materials from Jump Crypto Holdings have been admitted into discovery in a federal court as part of the US SEC’s lawsuit against Terraform Labs.
- The Court is free to disclose sensitive information about a potential motion practice or trial.
Materials from Jump Crypto Holdings have been admitted into discovery in a federal court as part of the US Securities and Exchange Commission’s (SEC) lawsuit against Terraform Labs.
Jump Trading’s cryptocurrency division, Jump Crypto Holdings, provided some files that Judge Jed Rakoff approved for confidential treatment in a filing on November 28 in the US District Court for the Southern District of New York.
According to reports, the SEC was investigating the company for its possible role in the depegging of TerraUSD (UST) and the collapse of the Terra ecosystem, two significant events that marked the beginning of the 2022 crypto market decline.
According to the filing, the court is free to disclose any sensitive information related to a potential motion practice or trial. Additionally, the filing said:
“If such disclosure is contemplated, the Court will provide prior notice to counsel for Jump so that counsel may be heard on any objections.”
Jump Crypto was a major player in the ecology of the company prior to Terra’s bankruptcy, taking part in investment rounds with the purported goal of creating a UST reserve.
In May, investors sued Jump Trading, claiming that the company and its CEO, Kanav Kariya, had manipulated the price of UST in order to benefit by around $1.3 billion.
Do Kwon, a co-founder of Terraform Labs, was accused by the SEC in February of allegedly “orchestrating a multi-billion dollar crypto asset securities fraud.” The lawsuit was still pending; however, in October, Kwon, Terraform Labs, and the SEC submitted petitions for summary judgment.
For using forged travel documents, Kwon was detained by Montenegrin authorities in June, and the co-founder of Terraform was later given a four-month prison sentence.
Kwon’s extradition to the United States or South Korea to face charges was approved by a Montenegrin court on November 24, subject to the minister of justice’s permission.
