Terraform Labs\u2019 court-appointed administrator has sued Jump Trading for secretly supporting the TerraUSD stablecoin, misrepresenting its stability, and profiting from the ecosystem\u2019s collapse.<\/p>\n
As a result, Todd Snyder is seeking $4 billion in damages from the firm\u2019s co-founder, William DiSomma, and Kanav Kariya, a former intern who later became president of its crypto-trading business.<\/p>\n
A Wall Street Journal report reveals<\/a> that the case was filed on Thursday in the U.S. District Court for the Northern District of Illinois, Eastern Division. The lawsuit accuses Jump of unlawfully profiting from its relationship with Terraform while investors suffered losses.<\/p>\n The SEC has previously stated in court filings that the company made approximately $1 billion in gains by selling Luna, Terraform\u2019s sister token. Snyder said Jump \u201cactively exploited the Terraform Labs ecosystem through manipulation, concealment, and self-dealing,\u201d calling the lawsuit a necessary step toward accountability for what he described as the largest collapse in crypto history.<\/p>\n The complaint details that as early as 2019, the two firms entered into secret agreements that allowed Jump to purchase millions of Luna tokens at prices far below market value. In one deal, it allegedly bought the cryptocurrency for 40 cents per coin, later selling when prices exceeded $110.<\/p>\n The trading company is also accused of entering<\/a> into a confidential \u201cgentlemen\u2019s agreement\u201d to help maintain TerraUSD\u2019s dollar peg, an arrangement the lawsuit says was concealed to avoid regulatory scrutiny.<\/p>\n In May 2021, TerraUSD briefly slipped<\/a> below its $1 peg before recovering after Jump allegedly intervened by purchasing the stablecoin, while publicly crediting the rebound to Terraform\u2019s algorithm. In the aftermath, the case says the company also renegotiated its contracts to remove vesting requirements, which allowed it to receive and sell Luna tokens freely on the open market.<\/p>\n After the formation of the Luna Foundation Guard, the complaint further claims that nearly 50,000 Bitcoin were transferred to Jump during the May 2022 crisis without any written agreement. It also alleges that DiSomma contacted other trading firms in search of bailout funding, actions that are said to have fast-tracked Terraform\u2019s collapse.<\/p>\n Jump has since denied the allegations. \u201cThis is a desperate attempt by Terraform Labs to shift blame and financial responsibility away from the crimes that Do Kwon committed,\u201d a company spokeswoman said, adding that it plans to defend itself against the \u2018baseless claims.\u2019<\/p>\n Terraform collapsed in 2022 after its stablecoin lost its dollar peg, which sent Luna to near zero and wiped out roughly $40 billion in value. The firm later filed for bankruptcy in January 2024 and agreed<\/a> to pay about $4.5 billion to settle with the SEC, while founder Do Kwon was sentenced<\/a> last week to 15 years in prison after pleading guilty to criminal charges.<\/p>\n The post Terraform Labs Sues Jump Trading for $4B Over Alleged $1B Profit from Terra Collapse<\/a> appeared first on CryptoPotato<\/a>.<\/p>","protected":false},"excerpt":{"rendered":" Terraform Labs\u2019 court-appointed administrator has sued Jump Trading for secretly supporting the TerraUSD stablecoin, misrepresenting its stability, and profiting from the ecosystem\u2019s collapse. As a result, Todd Snyder is seeking $4 billion in damages from the firm\u2019s co-founder, William DiSomma, and Kanav Kariya, a former intern who later became president of its crypto-trading business. Details […]<\/p>\n","protected":false},"author":0,"featured_media":121705,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-121704","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-discovery"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/121704"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=121704"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/121704\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/media\/121705"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=121704"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=121704"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=121704"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Jump Denies Accusations<\/h2>\n