Terraform Labs Hits Jump Trading With $4B Lawsuit Over Terra Crash
5 Regulation Terraform Labs' administrator sues Jump Trading for $4 billion, alleging market manipulation and concealed profits that contributed to Terra's $40 billion collapse.
The administrator managing the wind-down of Terraform Labs has filed a $4 billion lawsuit against Jump Trading, alleging market manipulation, concealed profits, and a significant role in the collapse of Terra. The lawsuit, filed in bankruptcy proceedings, accuses Jump Trading, its co-founder William DiSomma, and former head of crypto Kanav Kariya of making illegal profits and manipulating the market during TerraUSD’s (UST) frequent de-pegging events in 2021 and 2022. Jump allegedly made large, undisclosed purchases of UST whenever it traded below its $1 peg, temporarily stabilizing the price but creating an artificial sense of demand. The administrator claims this delayed the inevitable collapse and allowed Jump to profit by about $1 billion. The collapse of Terra in May 2022 wiped out an estimated $40 billion in market value and caused widespread losses. The administrator seeks to hold Jump accountable and recover losses for creditors, aiming to discourage similar conduct in crypto markets.
