Terraform Administrator Seeks $4B From Jump Trading in New Lawsuit

A court-appointed administrator has just filed a major lawsuit against Jump Trading for its alleged role in the collapse of the Terraform Labs ecosystem.

The case comes years after Terraform Labs collapsed, which still affects the crypto market. Many investors have not recovered their losses, and the legal fight has now moved into a new stage.

Terraform Labs Seeks $4B From Jump Trading

Todd Snyder, the court-appointed administrator overseeing the Terraform Labs bankruptcy case, has filed a lawsuit seeking $4 billion in damages from Jump Trading. 

According to the complaint, Jump Trading engaged in deliberate market manipulation within the Terraform Labs ecosystem. Snyder said the firm backed the TerraUSD stablecoin during key moments to keep its price stable. 

However, Jump Trading later pulled that support in a way that caused serious harm. The administrator said these actions let Jump Trading make money while everyday investors lost heavily.

The lawsuit also claimed that Jump Trading hid important details about its role and put its own profits ahead of the wider market. Snyder said this behavior worsened the collapse of TerraUSD stablecoin and Terraform Labs, increasing losses across the crypto industry.

Jump Trading Accused of Profiting From Terra Collapse

As reported, the administrator also pointed to prior regulatory filings that suggest Jump Trading earned significant profits from its dealings with Terraform-related tokens. 

According to these filings, the firm generated close to $1 billion by selling tokens connected to the Terra ecosystem. Snyder said these profits came directly from actions that shook the market. 

The case also named Jump Trading co-founder William DiSomma and former executive Kanav Kariya as major figures in what is described as the biggest collapse in crypto history.

In response to the new lawsuit, Jump Trading has rejected the claims made in the lawsuit. A spokesperson for the firm described the case as an effort to shift responsibility away from Terraform Labs and its convicted founder. The company stated that it plans to challenge the allegations and defend its actions in court.

Do Kwon Sentenced to 15 Years Over Terra Fraud

The lawsuit followed a case by Three Arrows Capital (3AC), which sued Terraform Labs for $1.3 billion over investor losses after the Terra network collapsed in 2022. The company’s founder Do Kwon admitted that he misled community members about the stability of the TerraUSD stablecoin during periods of market stress. 

A court recently sentenced Kwon to 15 years in prison after admitting that he led a large-scale fraud. The judge described the case as one of the most damaging frauds ever prosecuted at the federal level.