worldcoinindex.com
The fallout from Terraform Labs’ spectacular 2022 collapse is entering a new legal phase, with the company’s liquidation administrator launching a sweeping lawsuit against Jump Trading and senior executives tied to its crypto operations.
Todd Snyder, the court-appointed administrator overseeing Terraform’s wind-down, has filed a claim seeking roughly $4 billion in damages from Jump Trading, co-founder William DiSomma, and former president Kanav Kariya. The lawsuit alleges that Jump played a central role in artificially supporting Terraform’s ecosystem before it unraveled, ultimately profiting billions while investors were left exposed.
Terraform, founded by Do Kwon, imploded when its algorithmic stablecoin TerraUSD lost its dollar peg and triggered a rapid collapse of Luna. The crash erased more than $40 billion in market value and set off a chain reaction of failures across the crypto lending sector. After failed revival efforts, Terraform entered bankruptcy proceedings in 2024 and later agreed to pay $4.47 billion to the U.S. Securities and Exchange Commission to settle civil charges.
Snyder claims Jump struck undisclosed arrangements that temporarily stabilized TerraUSD, creating the illusion that the system was functioning as designed. According to the complaint, these actions allowed Jump to exit positions at a profit before the broader market collapse, leaving ordinary investors misled about the risks embedded in the stablecoin’s mechanics.
Regulators have previously detailed similar allegations. The SEC said Jump’s crypto arm, Tai Mo Shan, purchased $20 million worth of TerraUSD during a brief depegging event in May 2021. In return, the firm allegedly received early access to unlocked Luna tokens, which it later sold. The SEC accused Tai Mo Shan of generating approximately $1.28 billion from the arrangement, a case that concluded with a $123 million settlement.
Jump has pushed back strongly against the new lawsuit, characterizing it as an attempt to deflect responsibility from Terraform and its founder. The firm has said it intends to contest the claims aggressively.
Meanwhile, efforts to recover funds for creditors continue. Roughly $300 million in assets have been clawed back so far, according to reports, even as legal battles over accountability for one of crypto’s largest failures intensify.