Terraform Admin Sues Jump Trading for $4B in Terra Case

Todd Snyder, the court-appointed administrator overseeing the bankruptcy of Terraform Labs, has filed a lawsuit seeking $4 billion in damages from high-frequency trading firm Jump Trading and two of its executives, accusing them of secretly propping up the failed TerraUSD stablecoin and profiting from its eventual collapse.

The complaint, filed Thursday in the U.S. District Court for the Northern District of Illinois Eastern Division, targets Jump Trading along with cofounder William DiSomma and Kanav Kariya, who previously served as president of the firm's cryptocurrency trading unit. Snyder alleges that Jump entered into undisclosed agreements with Terraform Labs starting in 2019, allowing the trading firm to acquire millions of Luna tokens, the sister asset to TerraUSD, at deeply discounted prices. In one such deal, Jump purchased Luna for 40 cents per token while market prices exceeded $110, the suit claims. These arrangements enabled Jump to generate substantial gains, including approximately $1 billion from selling Luna after the ecosystem's downfall, according to prior court filings by the Securities and Exchange Commission.

The lawsuit further contends that Jump and...