Jump Trading Wants to Transfer Terra Lawsuit to California

News | June 13, 2023 By:

A class action lawsuit against Jump Trading, a high-frequency and algorithmic trading firm, could be moved from Illinois to California, according to a motion filed by the defendants. The lawsuit accuses Jump Trading and its CEO, Kanav Kariya, of manipulating the price of TerraUSD, a stablecoin that collapsed in 2022.

The lawsuit was filed on May 9, 2023, by Taewoo Kim, who claims to represent other victims of the Terra/Luna ecosystem crash. Kim is backed by law firms Selendy Gay and Robbins Geller Rudman & Dowd LLP. The suit alleges that Jump Trading and Kariya made $1.3 billion by secretly supporting TerraUSD and violating various regulations.

The defendants have denied any wrongdoing and filed a motion on June 9, 2023, to move the case from Illinois to California, where another similar lawsuit has been pending for over a year. They argue that Illinois has no connection to the case and that transferring it to California would speed up the legal process and avoid duplication of efforts.

“There is no legally compelling connection to Illinois, and nearly all of the relevant witnesses and documents either are located outside Illinois or are just as easily accessed elsewhere,” the motion said. “Given the existence of Patterson, this federal question case brought by a nonresident Plaintiff on behalf of a purported nationwide class should be transferred to California for the convenience of parties and witnesses and in the interest of justice.”

TerraUSD was an algorithmic stablecoin that was supposed to maintain a 1:1 peg with the US dollar by using Luna, a native token that acted as collateral. However, in May 2022, TerraUSD lost its peg and plummeted to near zero, wiping out billions of dollars from the market.

The founder of Terra/Luna, Do Kwon, was arrested in March 2023 in Montenegro for allegedly using fake travel documents. He faces potential prison time in both the US and South Korea.

A copy of the original filing can be found here.