Liquidator Pursues $4 Billion in Claims Against Jump Trading Following Terraform Collapse

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The liquidator for the bankrupt Terraform Labs has initiated a lawsuit against Jump Trading and two of its former executives. The complaint seeks to recover approximately $4 billion in damages, alleging their role in the firm’s 2022 multibillion-dollar downfall.

Todd Snyder, the court-appointed plan administrator for Terraform Labs, filed the suit against Jump Trading, its co-founder William DiSomma, and former president Kanav Kariya. The Wall Street Journal first reported the legal action, which was later confirmed by the liquidator in a social media post.

This lawsuit follows the catastrophic collapse of Terraform Labs and its algorithmic stablecoin, TerraUSD, in 2022. The depegging event triggered a destructive spiral that also obliterated the value of its sister token, Luna. The fallout erased over $40 billion in market value and ignited a contagion that bankrupted several major crypto lending firms.

After failing to resuscitate the project, Terraform Labs filed for Chapter 11 bankruptcy in the US in 2024. The company subsequently agreed to a $4.47 billion settlement with the Securities and Exchange Commission. The legal repercussions also extended to founder Do Kwon, who was sentenced to 15 years in US prison last week after pleading guilty to criminal charges.