Judge lets Terraform use Jump documents, denies four late claims

Bankruptcy Judge Brendan L. Shannon in Delaware ruled that Terraform Labs’ Plan Administrator may use certain Jump Trading materials in an Illinois securities lawsuit, while also denying four late-filed crypto-loss claims. The judge issued a certification on July 8 and entered a signed order on July 9 (Dockets 1276, 1281) modifying the bankruptcy protective order to allow those reproduced documents to be used in the Illinois case, including in an amended complaint.

The judge found the Plan Administrator had reproduced materials identified in the record as “Jump Reproduced Documents” in the Illinois action in a manner that violated the original protective order. The order permits use of those reproduced materials in the Illinois litigation effective immediately but leaves any decision about removing confidentiality designations to the court handling the Illinois case.

The Plan Administrator’s complaint seeks at least $4 billion and alleges that Jump entered an undisclosed arrangement to support the TerraUSD stablecoin and received about $1.5 billion in Bitcoin reserves without written agreements or oversight. The Delaware order allows the Plan Administrator to rely on the reproduced materials as evidence in pursuing those claims. The judge declined to rule on the merits of the complaint or on whether the documents prove the allegations.

Jump Trading opposed the change, stating it had allowed limited reproduction only for use within the bankruptcy proceeding and arguing that broader use would risk exposing competitively sensitive information and could bypass discovery stays in securities litigation. The Delaware order preserves confidentiality protections and assigns questions about public disclosure and evidentiary weight to the Illinois court.

Separately, the Delaware court denied motions from four named individuals who sought permission to file crypto-loss claims after the bankruptcy deadline and directed claims agent Kroll to update the claims register to reflect those denials. The order applied to those four motions and did not address other late-filed claims.

The Plan Administrator has reported about 16,640 submitted crypto-loss claims and is reviewing submissions on a rolling basis. Submitted claims are not the same as allowed claims; only allowed claims will be eligible to share in any distributions if assets become available.

Any effect on creditor recoveries will depend on the outcome of the Illinois litigation. If the suit proceeds past pretrial stages and results in a judgment or settlement, any net proceeds could increase the assets available for allowed claimants. If the suit is dismissed or yields no recoverable assets, the permission to use the reproduced documents will not itself generate funds for creditors.