A judge in the US has granted Jump Crypto's request to submit certain materials confidentially during the discovery phase of the US Securities and Exchange Commission's lawsuit against Terraform Labs and its founder Do Kwon.
Judge Allows Jump Crypto to File Terra Papers Secretly in SEC Case
Federal Judge Jed Rakoff noted that if the court later decides that a document should be made public, that decision could be overturned.
Jump Crypto is accused of manipulating the price of stablecoin TerraUSD and making a profit of $1.28 billion in return.
According to the SEC, Terra loaned 30 million Terra (LUNA) tokens to a US trading firm in November 2019 and another 65 million LUNA in September 2020. The trading firm in question is claimed to be Jump Crypto.
Terra said the “loans” were to increase liquidity, but the SEC alleged that the trading firm was constantly selling LUNA into the market.
When TerraUSD lost its peg to the US dollar in May 2021, Jump Crypto made a deal to purchase a large amount of the stablecoin in an attempt to stabilize its value, according to securities regulators.
The SEC filed the complaint against Terra and Kwon in February of this year, nearly nine months after the Terra ecosystem collapsed.
The securities regulator alleges that Kwon orchestrated a multibillion-dollar cryptoasset securities fraud between April 2018 and May 2022.
*This is not investment advice.