Terraform Bankruptcy Administrator Sues Jump Trading for $4 Billion Over TerraUSD Collapse
Terraform Labs' plan administrator has filed a $4 billion lawsuit in federal court in the Northern District of Illinois against Jump Trading, co-founder William DiSomma, and former Jump Crypto president Kanav Kariya. The complaint alleges that Jump Trading unlawfully profited from and materially contributed to Terra's collapse through market manipulation, self-dealing, and asset misuse.
The lawsuit claims undisclosed agreements dating back to 2019 allowed Jump Trading to purchase large amounts of LUNA tokens below market value. Allegations include a "gentlemen's agreement" to support TerraUSD's peg, with Jump purchasing tens of millions of tokens during the May 2021 depeg event. The complaint further states that Jump later negotiated contract changes removing vesting restrictions, enabling them to sell LUNA faster and allegedly earn billions.
Terra's collapse began in May 2022 after TerraUSD lost its peg, resulting in over $40 billion in losses across the TerraUSD and LUNA tokens. This collapse contributed to broader turmoil in the cryptocurrency market, including the FTX collapse. Terraform Labs filed for bankruptcy in January 2024 and later agreed to pay about $4.5 billion to settle a U.S. Securities and Exchange Commission civil securities-fraud case.
Additionally, Terra's co-founder and former CEO, Do Kwon, was sentenced to 15 years in a U.S. prison in December 2025 and may face a separate criminal trial in South Korea. The Wall Street Journal was the first to report the lawsuit. As of press time, no public copy of the lawsuits had surfaced, and Terraform and Jump had not publicly commented on the case.
