Terraform Labs Administrator Files $4B Suit Against Jump Trading
- Terraform Labs seeks $4B recovery from Jump Trading after TerraUSD crash.
- Lawsuit focuses on Jump’s alleged profit and contribution to collapse.
- Case tests market-making, token incentives, and stablecoin reserves.
Todd Snyder filed a $4 billion lawsuit against Jump Trading in the U.S. District Court on December 18, 2025, alleging involvement in the TerraUSD crash.
The lawsuit potentially redefines market maker responsibilities and could influence future cryptocurrency regulation while highlighting past market vulnerabilities. Immediate market reactions are currently subdued.
The court-appointed plan administrator for bankrupt Terraform Labs, Todd Snyder, has filed a $4 billion lawsuit against Jump Trading. The suit accuses Jump of profiting from, and contributing to, the 2022 TerraUSD (UST) and LUNA collapse.
The lawsuit, lodged in the U.S. District Court for the Northern District of Illinois, targets Jump Trading, co-founder William DiSomma, and former Jump Crypto president Kanav Kariya. It claims they conducted undisclosed LUNA purchases at discounts and intervened in TerraUSD trading.
The collapse of TerraUSD significantly impacted the cryptocurrency market, wiping out approximately $40 billion in market value. The legal action seeks financial recovery for Terraform creditors following the ecosystem’s downfall.
Financial implications are central, with Terraform aiming to recover losses for creditors post-bankruptcy and after a $4.5 billion SEC settlement. The lawsuit may influence views on market-making roles and token incentives. https://twitter.com/terra_money/status/2001856896521908256
Jump Trading has rejected the allegations and stated its intention to contest the lawsuit. Todd Snyder, Court-Appointed Plan Administrator, Terraform Labs, emphasized, “This lawsuit represents an effort to hold accountable those who profited from the turmoil of the 2022 market.” The case highlights significant challenges and uncertainties within the cryptocurrency industry, particularly concerning market stability and regulator roles during crises.
The trial could lead to new financial, regulatory, or technological outcomes. Historical analysis shows that markets reacted strongly to the TerraUSD token’s pegging failure. Courts might reassess interaction norms between crypto projects and liquidity providers.
