Judge Needs Clarity on Jump Involvement
Jump Trading will be part of a civil trial next year alongside Terraform Labs and the US Securities and Exchange Commission (SEC). While the judge ruled that Terraform engaged in sales of unregistered securities, he needs more information on how Jump Trading acted as a market maker for the company. This request came after an internal whistleblower claimed knowledge of Jump’s intent to prop up TerraUSD in May 2021. If true, it would raise questions about Do Kwon’s claims regarding his algorithm’s ability to maintain TerraUSD at $1. The judge also emphasized the need to assess the credibility of the whistleblower.
Terraform Trial Date Set
Terraform Labs has denied selling unregistered securities. The judge has scheduled a new trial date for January 29, 2023. The SEC initially sued Kwon and Terraform in February for offering unregistered securities, resulting in a $40 billion loss in the crypto market. Kwon is currently serving time for passport fraud in Montenegro.
What 2024 Holds for the SEC and Crypto
The ruling against Terraform is just one of many high-profile enforcement actions taken against crypto products, companies, and individuals in 2023. Throughout the year, there were 501 stand-alone enforcement actions, including several related to cryptocurrency. The SEC has also sued PulseChain founder Richard Heart, former FTX CEO Sam Bankman-Fried, and FTX executives. Bankman-Fried will face the SEC’s consequences in March following his criminal conviction. The case against Heart will continue into the new year as the agency struggles to notify him directly. Additionally, Coinbase is engaged in a battle with the SEC over US crypto regulations, while Ripple Labs has appealed against the SEC, and decisions regarding spot Bitcoin exchange-traded funds are pending.
Hot Take: Conclusion
The involvement of Jump Trading in the Terraform saga has raised questions and will be examined in the upcoming civil trial. As the SEC continues its enforcement actions against crypto entities, 2024 is shaping up to be an eventful year for the commission and the cryptocurrency industry as a whole. With ongoing legal battles, regulatory challenges, and significant decisions to be made, the SEC’s actions will have a lasting impact on the future of cryptocurrencies.
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