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Federal Judge Accepts Confidential Documents from Jump Crypto in SEC v. Terraform Labs Case

Federal Judge Accepts Confidential Documents from Jump Crypto in SEC v. Terraform Labs Case

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A federal judge allowed Jump Crypto to confidentially submit discovery material in the SEC v Terraform Labs lawsuit. 

Federal Judge Jed Rakoff granted Jump Crypto’s motion to confidentially submit material in the discovery phase in the US Securities and Exchange’s (SEC) suit against Terraform Labs and its founder, Do Kwon

Jump Crypto May Submit Confidential Materials

In a November 28 filing in the US District Court for the Southern District of New York, Judge Rakoff allowed certain materials produced by Jump Crypto Holding, the crypto arm of Jump Trading, to be treated as confidential. 

In the filing, Judge Rakoff maintains:

“The Court retains discretion to make public any confidential materials in connection with future motion practice or trial.  

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 Allegedly Involved in Terraform Labs Scandal

Jump Crypto allegedly manipulated the price of the TerraUSD stablecoin and profited $1.28 billion from the alleged activity.

According to a report by the Block, cited by Blockworks, according to the SEC, Terra loaned “a US trading firm” 30 million Terra tokens in November 2019 and an additional 65 million LUNA in September 2020. According to the Block, the trading firm in question is believed to be Jump Crypto. The SEC further alleges Terra said the “loans” were to improve liquidity, but the trading firm was “continuously selling LUNA into the market.” 

The securities agency also claims when TerraUSD lost its peg to the US dollar, Jump Crypto agreed to acquire a large sum of the stablecoin to stabilize its value. 

The SEC’s February 2023 complaint states:

“Defendants falsely and misleadingly represented to the public that UST’s algorithm had successfully re-pegged UST to the dollar, giving the investing public the false and misleading impression that the re-peg had occurred without human intervention and misleadingly omitting the real reason for the re-peg: intervention by [Jump Crypto].”

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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