Terraform Labs Sues Jump Trading Over Alleged Role in Terra Collapse
The post Terraform Labs Sues Jump Trading Over Alleged Role in Terra Collapse appeared on BitcoinEthereumNews.com.
The fallout from the 2022 Terra implosion is not over. The administrator winding down what remains of Terraform Labs has filed a sweeping lawsuit against Jump Trading, accusing the high-frequency trading giant of unlawfully profiting from, and materially contributing to, the collapse of the Terra ecosystem. The suit, first reported by the Wall Street Journal, seeks roughly $4 billion in damages and reopens one of crypto’s most destructive chapters. Exclusive: The administrator winding down what remains of Do Kwon’s Terraform Labs has sued Jump Trading, alleging that the high-speed trading giant unlawfully profited from and contributed to the crypto empire’s collapse https://t.co/oPtzGFHNkJ — The Wall Street Journal (@WSJ) December 19, 2025 A $4B Lawsuit Reopens the Terra Wreckage According to the filing, Terraform Labs alleges that Jump Trading engaged in market manipulation tied directly to the 2022 collapse of Terra’s algorithmic stablecoin system. That failure erased more than $40 billion in value across UST and LUNA, triggering a chain reaction that destabilized the broader crypto market. The lawsuit claims Jump was not merely a bystander or liquidity provider. Instead, the liquidator argues Jump played an active role behind the scenes, striking undisclosed deals, trading ahead of the market, and extracting massive profits while the public system unraveled. At the center of the complaint is the assertion that Jump’s actions distorted market signals during critical moments, exacerbating losses for ordinary users while insulating the firm from the downside. Allegations of Secret LUNA Deals and Early Exits The most explosive claim concerns how Jump allegedly acquired and sold LUNA. Terraform’s liquidator says Jump Trading bought large amounts of LUNA at steep, undisclosed discounts through private arrangements. These purchases reportedly occurred before key market events, giving Jump a cost basis far below that of retail participants. As the Terra ecosystem briefly recovered in…
Filed under: News - @ December 20, 2025 10:15 am