- The lawsuit says that Jump made billions of dollars in illegal profits from a secret deal in 2021 that kept the failing TerraUSD stablecoin afloat, tricking investors and helping the Terra collapse in 2022, which cost $40 billion.
- Terra fell to $0.0009 shortly after breaking its record of $119. This means the cryptocurrency is practically worthless.
Terraform Labs, the developer behind the collapsed TerraUSD and Luna tokens, is about to go out of business after a huge failure. Now, the manager that the court chose is going after one of the biggest companies in the business.
After Terraform Labs filed for bankruptcy in January 2024, Todd Snyder is in charge of shutting it down. On December 19, 2025, he sued Jump Trading for $4 billion. The lawsuit also names William DiSomma, who co-founded Jump, and Kanav Kariya, who used to be the president of the crypto unit and left the company in 2024.In May 2021, Jump made a secret deal to buy $20 million worth of TerraUSD when it briefly lost its $1 peg. Jump got early access to Luna tokens at a lower price in return. Earlier findings from the U.S. Securities and Exchange Commission (SEC) show that they later sold them for a profit of $1.28 billion.
This setup is said to have fooled people into thinking that TerraUSD was stable on its own. But it wasn’t. When the token completely fell apart in 2022, it lost about $40 billion in value. That hurt everyday investors and set off a chain of failures in crypto lending companies.
Snyder says that Jump’s actions were “illegal conduct that directly caused the largest crypto collapse in history.” He wants to give the people who lost money their money back. Jump Trading isn’t keeping quiet. A spokesperson said that the lawsuit is a “desperate attempt” to put the blame on them instead of Terraform’s founder, Do Kwon. In August 2025, Kwon admitted to fraud and was given a 15-year prison sentence. Jump plans to put up a strong fight in court. Terraform paid a huge $4.47 billion to the SEC to settle in 2024. This lawsuit against Jump could bring in a lot more money for creditors, since they have only gotten back $300 million so far.
Legal Notice: The information presented in this article reflects claims made in ongoing legal proceedings and does not constitute proven facts. All allegations are subject to court verification. This material is for informational purposes only and should not be taken as legal or investment advice.
Update 9:34 A.M. : Following the news, Terra Classic rose by approximately 7%.
