Jump Trading hit with $4B lawsuit tied to $50B Terra crash: WSJ
The administrator of Terraform Labs' bankruptcy sued Jump Trading for $4 billion, alleging unlawful profit from the 2022 Terra crash.Summary
Todd Snyder, the bankruptcy administrator for Terraform Labs, has filed a $4 billion lawsuit against trading firm Jump Trading, its co-founder William DiSomma, and former crypto trading head Kanav Kariya. The suit, reported by the Wall Street Journal, alleges that Jump Trading unlawfully profited from and contributed to the 2022 collapse of the Terra ecosystem, which resulted in approximately $50 billion in losses. The filing claims Jump "actively exploited" the system through manipulation and self-dealing, aiming to recover funds for creditors and harmed investors. Specifically, the lawsuit details secret agreements where Jump could buy LUNA at a steep discount ($0.40) in exchange for helping maintain TerraUSD's (UST) peg to the dollar, allegedly hiding flaws in the algorithmic mechanism. Furthermore, the suit claims the Luna Foundation Guard Bitcoin reserve was directed by Do Kwon and Kariya, transferring nearly 50,000 BTC to Jump without a written agreement. Jump Trading has denied the allegations, and this is not the first legal action against the firm regarding Terra; it previously settled with the SEC for $123 million over misleading investors about UST's stability.
(Source：Cointelegraph)