A Delaware bankruptcy judge has cleared Terraform Labs’ Plan Administrator to use Jump Trading documents in a $4 billion lawsuit, while also tossing four late-filed crypto-loss claims from individual creditors.
The rulings, issued July 8 and 9, are procedural. They do not decide whether Jump owes money or how much creditors might eventually recover. But they reshape the legal battlefield in Terraform’s Chapter 11 wind-down.
Judge Brendan L. Shannon found that the Plan Administrator violated a protective order by using documents labeled “Jump Reproduced Documents” in an Illinois lawsuit. His July 8 order then modified that protective order to let the administrator use the materials in the Jump action – including in an amended complaint.
The change took effect immediately. The judge left it to the Illinois court to decide whether to remove confidentiality designations from the documents. The Delaware order does not make the documents public, nor does it rule on whether the evidence supports the $4 billion claim.
The Plan Administrator alleges Jump Trading entered a secret arrangement to prop up the TerraUSD stablecoin and later took $1.5 billion in Bitcoin reserves without written agreements or oversight. Those allegations have not been tested in court.
Jump opposed the modification, arguing it had shared the materials under restrictions limiting their use to the bankruptcy case. It said the change would let the administrator bypass a discovery stay in related securities cases and expose competitively sensitive information.
Separately, Judge Shannon denied motions from four individuals seeking permission to file crypto-loss claims after the deadline. The signed order, entered July 9 as Docket 1281, directs claims agent Kroll to update the register.
The ruling is narrower than some social media posts suggested. It does not bar every late claimant. The administrator reports roughly 16,640 submitted crypto-loss claims, but submitted claims are not the same as allowed claims. Only allowed claims will determine who shares in any eventual distribution.
For traders watching the Terraform bankruptcy, the key milestone is the $4 billion lawsuit against Jump. The green light on document use moves discovery forward. The claims ruling trims the pool of potential creditors but leaves the vast majority of claims still under review.
Next watch item: how the Illinois court handles the confidentiality designations, and whether the Plan Administrator files an amended complaint that puts the Jump documents on the record.
Judge allows Terraform Labs to use Jump Trading evidence in $4B lawsuit, blocking late claims
A judge lets Terraform Labs use documents from Jump Trading in a $4 billion lawsuit involving lost crypto funds, while rejecting late claims from some creditors. This affects Terraform creditors by shaping how legal evidence can be used, potentially impacting how much they may recover.