Jump Trading Fails to Move Terra Crypto Manipulation Case to California

News | June 14, 2024 By:

On Thursday, June 6, 2024, the United States District Court for the Northern District of Illinois denied a motion to transfer a class action lawsuit surrounding the collapse of the Terra cryptocurrency system to the Northern District of California.

The class action was filed in May 2023 by Taewoo Kim against Jump Trading, LLC and its president Kanav Kariya. Kim alleges that Jump Trading manipulated the price of TerraUSD (UST), a stablecoin associated with the Terra blockchain, and Luna, another digital currency tied to Terra.

Kim claims that in May 2021, when UST began fluctuating from its $1 peg, Jump Trading secretly purchased over 62 million UST tokens to artificially inflate the price back to $1. According to the lawsuit, Terraform Labs, the company behind Terra, then rewarded Jump Trading with over 61 million Luna tokens worth $1.28 billion.

Jump Trading filed a motion to transfer the case to California, where a similar lawsuit called Patterson v. Terraform Labs had been pending since June 2022 in the Northern District. That case named Jump Trading and Kariya as defendants over the Terra collapse.

In considering the motion, Judge Nancy Maldonado analyzed both private factors like the convenience of parties/witnesses, as well as public factors such as court congestion. On private factors, the court found witnesses would be inconvenienced in both forums, but that litigating in Illinois would disadvantage Kim in getting access to former Jump Trading witnesses. Maldonado also noted material events appeared to have emanated from Jump Trading’s headquarters in Illinois.

Regarding public factors, Maldonado determined the case would likely progress faster by staying in Illinois rather than transferring to California, where the Patterson case has been stayed pending appeal. The court also believed Illinois had a stronger public interest than California, given Jump Trading is based in the state.

Ultimately, the judge ruled Jump Trading failed to demonstrate transferring would better serve convenience or justice. Both private and public factors had to support transfer, but neither strongly weighed in Jump Trading’s favor, according to the opinion. As a result, the motion was denied and the case will continue in Illinois.

Please contact BlockTribune for access to a copy of this filing.