Jump Trading Sued for $4B Over Terra Collapse Role

Terraform Labs' liquidator, Todd Snyder, has filed a $4 billion lawsuit against Jump Trading and its executives for allegedly manipulating the TerraUSD (UST) stablecoin before its collapse in May 2022.

The lawsuit claims Jump Trading entered a secret deal to artificially support UST's price, misleading investors about its stability.
Jump Trading is accused of buying large amounts of UST when it lost its peg in May 2021, falsely presented as a natural recovery by Terraform Labs.
The agreement allowed Jump to purchase LUNA tokens at a 99% discount, reportedly making a profit of $1.28 billion.

This legal action builds on previous SEC findings that Jump's subsidiary misled investors about UST's stability, resulting in a $123 million settlement without admitting fault.

Jump Trading denies the allegations, calling the lawsuit a "desperate attempt" to deflect blame from Terraform Labs and Do Kwon.
The outcome could influence transparency requirements for market makers in crypto.
Do Kwon was recently sentenced to 15 years in prison for his role in the Terra/Luna collapse and may face further charges in South Korea.

The original Terra token has been rebranded as Terra Classic (LUNC), while the new Terra (LUNA) trades at approximately $0.11.