Demanding $4 billion in compensation! Terraform Labs bankruptcy administrator sues Jump Trading: directly responsible for LUNA collapse!

According to the Wall Street Journal, Todd Snyder, the bankruptcy administrator of Terraform Labs (a cryptocurrency company founded by Do Kwon), has filed a lawsuit in the federal court in Illinois, accusing high-frequency trading company and cryptocurrency market maker Jump Trading and its executives, including co-founder William DiSomma and former head of the encryption department Kanav Kariya, seeking damages of up to $4 billion.
(Preliminary summary: Arthur Hayes: A big shot "completely liquidated cryptocurrency", is Jump Trading the culprit?)
(Background supplement: Terra was accused and stabbed in the back! Apply to the court for Jump Trading's "short UST report")

According to the Wall Street Journal, Todd, the bankruptcy administrator of Terraform Labs (a cryptocurrency company founded by Do Kwon) Snyder, has filed a lawsuit in federal court in Illinois, US, against high-frequency trading company and cryptocurrency market maker Jump Trading and its executives, including co-founder William DiSomma and former head of the encryption department Kanav Kariya, seeking damages of up to $4 billion.

Jump Trading was accused of being responsible for the collapse of LUNA

Todd Snyder alleged in the complaint that Jump Trading reached a secret agreement with Terraform Labs starting in 2019 to purchase large quantities of LUNA tokens at a deeply discounted price; and in exchange, Jump secretly bought a large amount of UST to maintain its 1:1 ratio with the US dollar when TerraUSD (UST) first decoupled in May 2021. anchoring, and at the same time, Terraform claimed that this was an automatic restoration of anchoring, thereby misleading investors into believing that the Terra system was highly stable.

The complaint further states that Jump Trading then requested that the token lock-up restrictions be lifted and quickly sold LUNA to make billions of dollars in profit. When Terra finally collapsed in May 2022, Luna Foundation Guard (LFG) also transferred approximately $1.5 billion worth of Bitcoin to Jump without a formal written agreement, allegedly enriching itself and exacerbating the collapse damage.

Snyder emphasized that Jump Trading deeply exploited the Terraform ecosystem through market manipulation, information concealment, and self-enrichment behaviors, making it rich while causing thousands of investors to suffer huge losses, which directly led to the largest cryptocurrency crash in history.

Terra Ecosystem Evaporates $40 Billion

This lawsuit is the latest development in the legal action following the Terra collapse. Terraform Labs' algorithmic stablecoin UST lost its peg in May 2022, causing sister token LUNA to plummet to nearly zero, wiping out approximately $40 billion in market value from the entire ecosystem, wiping out the funds of hundreds of thousands of investors around the world, and triggering a cascading collapse effect in the crypto industry, including the collapse of the FTX exchange in November of the same year.

Terraform Labs filed for bankruptcy in January 2024 and settled with the U.S. Securities and Exchange Commission (SEC), paying a fine of approximately $4.5 billion. Founder Do Kwon pleaded guilty to two criminal charges in August 2025 and was sentenced to 15 years in prison last week.