Jump Crypto allowed to submit certain info confidentially in SEC’s case against Terraform Labs
A U.S. court has ruled that Jump Crypto, which has been identified as a “third party” in the SEC’s ongoing case against Terraform Labs, will be allowed to submit certain information to the court in confidence, according to a Nov. 28 order.
The SEC sued Terraform Labs and its founder and former CEO, Do Kwon, in February. The regulator alleged that Terraform Labs and Kwon offered and sold unregistered securities and engaged in fraud, raising billions of dollars in the process. Its associated stablecoin, TerraUSD (UST), lost virtually all its value in May 2022. The stablecoin, now under the ticker USTC, is currently valued at just $0.04.
Judge Jed S. Rakoff clarified that, at its discretion, the court has the authority to publicize those filings in the future. Should this occur, Jump Crypto’s legal team will be notified, granting them the opportunity to raise any objections.
Jump’s possible role in the TerraUSD collapse
Jump Crypto is not a defendant in the case against Terraform Labs. However, the SEC believes that Jump was instrumental in the collapse of the UST stablecoin.
An October letter from Terraform Labs’ defense outlines those allegations. In its allegations, the SEC claimed that when UST first deviated from dollar parity in May 2021, Terraform Labs allegedly orchestrated a scheme involving Jump Crypto purchasing “substantial amounts” of the ailing stablecoin to boost its price artificially. The SEC also claimed the second depeg, which took place in May 2022, did not allow for any such recovery due to a lack of options similar to the Jump Crypto deal.
Terraform Labs has denied those allegations. It said that Jump Crypto’s trading activities did not lead to UST’s 2021 recovery and asserted that data would support this claim. It also claimed that the depeg in May 2022 resulted from deliberate attempts to short UST and said that it attempted to combat those actions with “a direct, public intervention.”
The post Jump Crypto allowed to submit certain info confidentially in SEC’s case against Terraform Labs appeared first on CryptoSlate.
Credit: Source link
