Judge Approves Jump Crypto's Evidence Submission in SEC Case Against Terraform Labs
Summary:
In the ongoing SEC case against Terraform Labs, a U.S. federal judge approved Jump Crypto Holdings to submit confidential evidence. The firm, scrutinized for allegedly contributing to the 2022 crypto market crash, may face public disclosure of these materials in future court proceedings. Investors previously sued Jump Trading and its CEO for purported price manipulation, leading to substantial profit. Terraform co-founder, Do Kwon, is currently serving a jail sentence in Montenegro for using falsified travel documents and faces extradition to either the U.S. or South Korea.
A U.S. federal judge has given the green light to Jump Crypto Holdings to submit evidence in the ongoing Securities and Exchange Commission (SEC) case against Terraform Labs. In a statement made public on Nov. 28 at the U.S. District Court in New York’s Southern District, Judge Jed Rakoff sanctioned the submission of confidential documents from Jump Crypto Holdings, which represents the cryptocurrency division of Jump Trading. The SEC had previously turned its investigative spotlight on the firm for its supposed role in the events that led to the detaching of TerraUSD (UST) from its peg and the subsequent crash of Terra — a significant precipitating factor in the 2022 crypto market slump.
The court filing stated that “[t]he Court reserves the right to disclose any confidential documents if needed in future legal proceedings or during the trial,” and added that before revealing any such information, the Court would notify Jump's legal representatives to discuss any objections they might have.
In the chronicle leading up to Terra’s downfall, Jump Crypto had maintained a prominent place in the company’s financial network by participating in funding rounds presumed to set up a UST reserve. In May, investors registered a lawsuit against Jump Trading, claiming the company and its CEO, Kanav Kariya, had artificially manipulated UST's price to reap approximately $1.3 billion in profits.
The SEC had leveled charges against Terraform Labs and its co-founder, Do Kwon in February for purportedly engaging “in a multi-billion dollar crypto asset securities scam.” At the time of reporting, the case was still proceeding; nonetheless, the SEC, along with Kwon and Terraform Labs, filed applications for summary judgment in October.
Authorities domiciled in Montenegro apprehended Kwon in June due to his use of forged travel documents, and later sentenced the Terraform co-founder to a four months’ jail term. On Nov. 24, a Montenegrin court ratified Kwon’s extradition – now pending the justice minister's seal of approval. Consequently, Kwon may be extradited to either the United States or South Korea to respond to the charges against him.
Published At
11/28/2023 9:35:07 PM
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