Jump Trading Hit with $4B lawsuit Tied to Terra’s $50B Crash
Terraform Labs’ bankruptcy administrator, Todd Snyder, has filed a lawsuit seeking $4 billion in damages from Jump Trading, its co-founder William DiSomma, and former executive Kanav Kariya. The suit alleges Jump Trading unlawfully profited from and contributed to the 2022 collapse of Terra and its algorithmic stablecoin, TerraUSD (UST), resulting in about $50 billion in losses. According to the filing, Jump and Terraform Labs made secret deals allowing Jump to buy LUNA tokens at steep discounts in exchange for helping maintain UST’s price peg, allegedly masking problems in the stablecoin’s mechanism and manipulating markets. Additionally, nearly 50,000 BTC from the Luna Foundation Guard, a reserve meant to protect UST, was reportedly transferred to Jump without a formal agreement. The accusations of manipulation mirror an earlier 2023 lawsuit and relate to broader investigations, including a $123 million SEC settlement tied to TerraUSD disclosures. Kariya resigned amid rising scrutiny, and legal actions against involved parties remain ongoing.
