Jump Crypto files in SEC v. Terraform Labs filed a confidential case

A federal judge has received materials from Jump Crypto Holdings in a US Securities and Exchange Commission (SEC) lawsuit against Terraform Labs.

In a lawsuit filed Nov. 28 in the 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 being investigated by the SEC for its alleged involvement in the events that led to the collapse of TerraUSD (UST) and Terra – one of the major events that triggered the 2022 crypto market crash.

“[T]The court retains its discretion to disclose any confidential material in connection with a future motion practice or trial. “If such disclosure is contemplated, the court shall give advance notice to trial counsel to hear counsel on any objection.”

Prior to Terra's collapse, Jump Crypto played a significant role in the organization's ecosystem, participating in funding rounds intended to form the UST reserve. Investors filed a lawsuit against Jump Trading in May, alleging that the firm and its CEO, Kanav Karia, exploited UST prices to make nearly $1.3 billion in profits.

RELATED: Jump Trading Wants to Take Terra Class-Action Lawsuit to California

In February, the SEC charged Terraform Labs and co-founder Do Kwon with “orchestrating a multi-billion dollar crypto-asset securities fraud.” The case is still pending at press time, but both the SEC and Kwon and Terraform Labs filed motions for summary judgment in October.

Montenegrin authorities arrested Kuo in June for using fake travel documents, later sentencing the Terraform founder to four months in prison. In the year On November 24, a Montenegrin court approved Kwon's extradition to be approved by the justice minister, meaning he could be sent to the US or South Korea to face charges.

Magazine: Terra falls because she uses hubris as leverage – Knifefight