Jump Trading LLC and its cryptocurrency arm have convinced a California court that it lacks jurisdiction in a lawsuit from investors affected by the 2022 TerraUSD collapse. The ruling allows the companies to avoid the case for now. Magistrate Judge Peter H. Kang issued the order, giving plaintiffs time to respond.
In a recent decision, Jump Trading LLC and its cryptocurrency operations successfully argued against jurisdiction in a federal court in California. The lawsuit stems from the rapid devaluation of TerraUSD stablecoin in 2022, which left investors unable to liquidate their holdings amid the collapse.
Magistrate Judge Peter H. Kang of the US District Court for the Northern District of California ruled on Tuesday that the plaintiffs did not demonstrate sufficient ties to the state. Specifically, the investors failed to show that the companies “either purposefully directed their activities to California or purposefully availed themselves of the privileges of California,” as stated in the order. This lack of evidence prevented the court from exercising specific personal jurisdiction over Jump Trading.
The case highlights ongoing legal challenges in the cryptocurrency sector following high-profile failures like TerraUSD. Judge Kang provided the plaintiffs until February to potentially amend their claims or take further action, though details on the exact deadline were not specified in available reports.
This development offers temporary relief to Jump Trading, a prominent trading firm, amid scrutiny over its role in crypto markets. The ruling underscores the complexities of jurisdiction in cross-border digital asset disputes.
