-640x358.jpg&w=1200&q=75)
The court-appointed administrator overseeing the wind-down of Terraform Labs has filed a $4 billion lawsuit against Jump Trading over alleged misconduct tied to the Terra ecosystem collapse.
The lawsuit was filed on December 19, 2025, in the US District Court for the Northern District of Illinois, according to reports citing court documents.
The complaint alleges that Jump Trading secretly manipulated markets connected to TerraUSD and LUNA ahead of the ecosystem’s dramatic failure in 2022.
The administrator claims these actions contributed to the destruction of roughly $40 billion in investor value across the Terra network.
Jump Trading co-founder William DiSomma and former Jump Crypto president Kanav Kariya are also named as defendants in the case.
The lawsuit accuses the defendants of market manipulation, concealment and self-dealing during periods of stress within the Terra ecosystem.
According to the filing, Jump allegedly entered undisclosed agreements that allowed it to temporarily stabilise TerraUSD’s peg.
These interventions were later presented publicly as natural market activity rather than coordinated support, the administrator claimed.
The complaint further alleges Jump received preferential access to tens of millions of LUNA tokens at substantial discounts.
The administrator said this access enabled Jump to profit while ordinary investors remained exposed to mounting risks.
When TerraUSD lost its peg again in May 2022, LUNA entered a hyperinflationary collapse that wiped out the ecosystem.
The lawsuit claims Jump benefited from opaque trading activity and asset transfers as the wider market unraveled.
The firm exploited undisclosed arrangements to exit profitably while retail investors bore the losses.
The administrator said.
Jump Trading has strongly denied the allegations outlined in the lawsuit.
This case is an attempt to shift blame away from Terraform and its founder.
A Jump Trading spokesperson said.
The firm argued it played no role in engineering the collapse of TerraUSD or LUNA.
The filing follows the recent sentencing of Terraform founder Do Kwon on fraud-related charges.
Regulators and courts continue to examine the actions of major counterparties involved in the Terra collapse.
Legal experts say the case could have significant implications for crypto market conduct standards.
At the time of reporting, Terra price was $0.1145.