Judge Grants Jump Crypto's Motion for Confidentiality in SEC Lawsuit Against Terraform Labs

According to Blockworks, a judge has granted Jump Crypto's motion to confidentially submit certain materials during the discovery phase in the US Securities and Exchange Commission's (SEC) lawsuit against Terraform Labs and its founder Do Kwon. Federal Judge Jed Rakoff filed the motion in New York on Tuesday. If the court later decides a document needs to be made public, the ruling may be overturned, Rakoff noted in his opinion. Jump Crypto has been accused of manipulating the price of stablecoin TerraUSD and in turn raking in a $1.28 billion profit. Terra, according to the SEC, loaned a US trading firm 30 million Terra (LUNA) tokens in November 2019 and an additional 65 million LUNA in September 2020. The trading firm in question is Jump Crypto, as reported by The Block. Terra claimed the loans were to improve liquidity, but the SEC alleged that the trading firm was continuously selling LUNA into the market. When TerraUSD lost its peg to the US dollar in May 2021, Jump Crypto entered into an agreement to purchase a large sum of the stablecoin in an effort to stabilize its value, according to securities regulators. The SEC filed its complaint against Terra and Kwon in February this year, about nine months after the Terra ecosystem collapsed. The securities regulator alleges that Kwon orchestrated a multi-billion dollar crypto asset securities fraud between April 2018 and May 2022. In its complaint, the SEC alleges that Kwon and his company deceived investors by making false claims that the Korean mobile payment processor Chai used the Terraform blockchain for transactions and settlements. Regulators say these claims were not true. Jury selection is scheduled to begin on January 29, 2024, in downtown Manhattan, should the case proceed to trial. Currently, both the SEC and Terra have requested a summary judgment, which, if granted, could result in the matter being settled outside of trial. In addition to the SEC's civil suit against him, Kwon faces criminal charges in the US in relation to the collapse of the Terraform ecosystem. Kwon is currently serving a four-month prison sentence in Montenegro for alleged document forgery. The country approved his extradition earlier this month. Following the completion of his sentence, authorities will decide whether to extradite the founder to the US or South Korea.