Terraform Liquidators Allege Jump Trading Helped Fuel Crypto’s Biggest Crash: Report

The administrators winding down what is left of Do Kwon’s Terraform Labs have turned on one of crypto’s biggest trading shops, alleging Jump Trading profited from Terra’s surge and helped lay the groundwork for its collapse.

Todd Snyder, the court-appointed plan administrator for the Terraform bankruptcy, filed a lawsuit in federal court in Illinois seeking $4B in damages from Jump Trading, co-founder William DiSomma, and former Jump Crypto president Kanav Kariya, the Wall Street Journal reported Thursday.

“Jump Trading actively exploited the Terraform Labs ecosystem through manipulation, concealment, and self-dealing that enriched Jump while financially devastating thousands of unsuspecting investors,” Snyder said in a statement.

“This action is a necessary step to hold Jump Trading accountable for illegal conduct that directly caused the largest crypto collapse in history.”

The Office of the Terraform Labs Plan Administrator has filed a $4B lawsuit against Jump Trading over its direct role in the collapse of Terraform Labs, seeking to hold Jump to account for enriching itself through illicit market manipulation, self-dealing, and misuse of assets.…

— Terra 🌍 Powered by LUNA 🌕 (@terra_money) December 19, 2025

Terra’s Death Spiral And The Contagion That Followed

Terraform’s collapse still hangs over the market. TerraUSD, known as UST, was billed as a stablecoin that would hold $1 through an algorithm tied to its sister token, Luna, known as LUNA. When UST broke its peg in May 2022, the mechanism unraveled and both tokens spiraled toward near zero in days.

The wipeout erased about $40B in value and rippled across the industry, squeezing lenders, funds, and exchanges that had treated UST yields and Luna liquidity as deep and durable.

Three Arrows Capital was among the first major casualties, with later failures piling up as confidence and collateral evaporated.

Terraform filed for bankruptcy in Jan. 2024, and public filings show the estate has recovered about $300M so far for creditors as it unwinds what remains.

Claims Of Peg Support And Profits From Terra’s Fall

Snyder’s complaint says Jump entered a secret arrangement to support TerraUSD’s peg before the final break and later walked away from the wreckage with outsized gains.

Regulators have previously pointed to Jump’s trading in Luna, with the SEC saying in court filings that Jump made about $1B in profit by selling the token.

The suit lands after a bruising year for Terraform’s former leadership. The company and Kwon agreed to a roughly $4.5B settlement with the SEC in 2024 following a jury verdict on securities fraud claims.
Kwon, once a celebrity founder who mocked critics as UST scaled, pleaded guilty in August 2025 and a New York federal judge sentenced him to 15 years in prison last week.