- The SEC and Terraform Labs are expected to face a trial on January 29, 2024.
- The trial will expose Jump Trading’s alleged involvement in the case.
- The court’s decision follows its recent ruling against Terraform Labs, alleging the firm violated securities laws.
In a recent development in the legal tussle between Terraform Labs and the Securities and Exchange Commission (SEC), the court has ordered a trial, scheduled for January 29, 2024, in the Manhattan federal court.
The decision follows the court’s recent ruling in favor of the regulators that claimed Terraform Labs and its Co-Founder, Do Kwon, were responsible for unregistered securities trade.
The scheduled trial intends to examine the “aggressive enforcement strategy” of the SEC along with unveiling the involvement of the investment firm Jump Trading in the case. According to U.S. District Judge Jed S. Rakoff’s ruling, the regulator’s allegations against Jump Trading were “compelling but circumstantial, relying in large part on the testimony of Jump whistleblowers, whose credibility the jury will need to determine.”
Jump Trading had been under the scrutiny of the regulators in allegations of the firm’s involvement in de-pegging TerraUSD and the subsequent collapse of Terraform Labs. Last month, the court granted Jump Trading confidential treatment of the documents that the firm produced to defend its claims. However, the court asserted that the documents would be publicized later. The ruling read,
The Court retains discretion to make public any confidential materials in connection with future motion practice or trial. If such disclosure is contemplated, the Court will provide prior notice to counsel for Jump so that counsel may be heard on any objections.
While Judge Rakoff’s ruling on Thursday accused Terraform Labs and Do Kwon of violating U.S. securities law, the company strongly disagreed with the court’s decision. Recent reports suggested that the company believes that the judge sided with the regulators’ “meritless” fraud claims.
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