Terraform LabsTodd Snyder, the court-appointed plan administrator who oversaw ‘s liquidation process, filed a $4 billion lawsuit for damages against Jump Trading, the company’s co-founder William DiSomma, and former president Kanav Kariya, who left the company in 2024. According to the Wall Street Journal, Snyder claimed that Jump played a role in unlawful behavior in the process leading to the collapse of the Terra ecosystem in 2022. Algorithmic stablecoin structure led by Do Kwon, founder of Terraform Labs TerraUSDWith Luna losing its constant, it entered a “death spiral” and more than 40 billion dollars of value was erased from the markets. The liquidation administration requests that the claims be examined before the judiciary in order to increase the capacity to pay creditors.
$4 Billion Claim Against Jump Trading
In Snyder’s application to the court, Jump TradingIt is alleged that he “actively exploited” the Terraform Labs ecosystem and was part of a backdoor deal to increase the perception of value before the collapse of TerraUSD. Allegedly, the regulation in question stablecoin It paved the way for misleading investors about the effectiveness of the mechanism and provided Jump with billions of dollars in profits.
The lawsuit aims to place direct responsibility for Terraform’s multi-billion dollar collapse on Jump. In his statements in the WSJ report, Snyder positioned the relevant step as a necessary process to hold accountable for “illegal actions that led to the largest crypto crash in history.”
In the statement made by Jump, the lawsuit was described as a “desperate attempt” to shift responsibility away from Terraform and Kwon; It was reported that the company will defend strongly against the allegations. The news also stated that approximately $300 million worth of assets have been added to the compensation pool for creditors so far.
TerraUSD Intervention, SEC Filing and Road to Collapse
Snyder’s claims US Securities and Exchange CommissionIt proceeds on the same axis with the previous findings of (SEC). The SEC stated that Jump’s crypto unit, Tai Mo Shan, supported the market by purchasing approximately $ 20 million worth of TerraUSD during the short-term fixed loss of TerraUSD in May 2021, and in return received early unlocked Luna coins. According to the regulator, Tai Mo Shan was able to make a profit by selling the early released Luna coins on the market.
In the SEC’s complaint file, it was claimed that the regulation in question misled investors by strengthening the perception that the TerraUSD mechanism was “working successfully”; It was claimed that Tai Mo Shan earned $1.28 billion from the agreement. In this process SEC The news also included information that a compromise was reached between Tai Mo Shan and Tai Mo Shan, which included the payment of a fine of approximately 123 million dollars.
When attempts at recovery after the collapse on the Terraform front failed, the company filed for bankruptcy in 2024, and after the bankruptcy, a penalty and settlement package of $ 4.47 billion was agreed with the SEC. According to WSJ Do Kwon He was sentenced to 15 years in prison in the United States last week after pleading guilty to two separate charges in August.
