Terraform Labs’ bankruptcy estate has escalated the legal fallout from the Terra collapse with a new lawsuit seeking 4 billion dollars in damages from Chicago‑based trading firm Jump Trading and two of its senior executives. The case accuses Jump of secret deals, market manipulation, and self‑dealing that allegedly enriched the firm while deepening losses for Terra investors.
Terraform Allegations Against Jump Trading
The complaint, filed in the U.S. District Court for the Northern District of Illinois by plan administrator Todd Snyder, targets Jump Trading LLC, co‑founder William DiSomma, and former Jump Crypto president Kanav Kariya. It portrays Jump as a central architect of Terra’s rise and collapse rather than a neutral market maker.
According to the lawsuit, Jump entered into confidential agreements with Terraform Labs as early as 2019 to buy large amounts of LUNA at steep discounts, then later sought to lift vesting restrictions so it could sell those tokens faster into the market. The filing claims these moves generated near‑billion‑dollar profits while ordinary holders faced mounting risk.
Central to the case is an episode in May 2021, when TerraUSD briefly lost its one‑dollar peg. The suit alleges Jump bought significant volumes of UST to restore the peg. Yet, public messaging credited Terra’s algorithmic design rather than disclosing the intervention, which, the estate argues, misled the market about the system’s resilience.
The complaint also cites the transfer of nearly 50,000 bitcoin from the Luna Foundation Guard to Jump during Terra’s final unwinding in May 2022, allegedly without formal agreements or adequate consideration. Snyder characterizes this as misuse of assets meant to defend UST, and as part of a broader pattern of self‑serving conduct.
Legal Stakes for Jump Trading
Snyder’s office frames the lawsuit as an effort to recover value for creditors and hold a major trading firm responsible for behavior it describes as manipulation and concealment.
The Terra collapse erased about 40 billion dollars in market value. It triggered failures at several interconnected crypto businesses, making any new revelations in discovery potentially significant for ongoing civil and regulatory actions.
The case arrives after a Jump subsidiary agreed in 2024 to pay 123 million dollars to settle SEC allegations related to UST support, and after Terraform Labs itself reached a multi‑billion‑dollar settlement with U.S. regulators, handled mainly through the same bankruptcy process now driving this claim.
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