Todd Snyder, the administrator overseeing the liquidation of Terraform Labs, has accused market maker Jump Trading of directly contributing to the collapse of Do Kwon’s company.
The Office of the Terraform Labs Plan Administrator has filed a $4B lawsuit against Jump Trading over its direct role in the collapse of Terraform Labs, seeking to hold Jump to account for enriching itself through illicit market manipulation, self-dealing, and misuse of assets.…
— Terra 🌍 Powered by LUNA 🌕 (@terra_money) December 19, 2025
He has demanded $4 billion in damages from Jump, its co-founder William DiSomma, and the president of its cryptocurrency division, Kanav Kariya.
Secret Agreements
According to court documents cited by The Wall Street Journal, since 2019, a series of secret agreements existed between the market maker and Terraform. One such agreement allowed Jump to purchase LUNA at $0.4 when the market price of the asset reached $110.
The parties also had an informal agreement to support the TerraUSD exchange rate. Jump committed to artificially maintaining the algorithmic stablecoin’s peg to the dollar, concealing these actions from regulators and the community to avoid scrutiny.
In May 2021, the “stablecoin” lost its peg but recovered after secret support from Jump, Snyder claims. The market maker misled investors by stating that the asset’s price had recovered due to the algorithm’s work. In reality, the return to $1 was ensured by TerraUSD purchases made by the company.
Once the vulnerability of the stablecoin mechanism was acknowledged, Jump succeeded in removing the vesting period in contracts. This allowed the firm to sell LUNA monthly and profit from it, exacerbating the pressure on the token.
“Jump Trading actively exploited Terraform Labs through manipulation, information concealment, and self-serving actions that enriched it while leading to financial disaster for thousands of unsuspecting investors,” Snyder emphasized.
After the first stablecoin failure, the Luna Foundation Guard reserve Bitcoin fund was established under the de facto control of Kwon and Kariya. When TerraUSD’s price collapsed again in May 2022, this entity transferred nearly 50,000 BTC (~$1.5 billion at the time) without written agreements on asset usage terms.
The lawsuit claims that DiSomma attempted to salvage the situation by personally calling executives of other crypto companies in search of liquidity. However, this backfired: upon learning of the project’s issues, competitors began actively selling TerraUSD and Luna.
It is separately noted that in December 2024, Jump’s subsidiary, Tai Mo Shan, paid $123 million to settle claims regarding transactions with Terraform in 2021. During interrogations at the SEC, Kariya and DiSomma “hundreds of times” refused to testify, citing the right against self-incrimination. Kariya left Jump in 2024.
“This is a desperate attempt by Terraform Labs to shift blame and financial responsibility from the crimes committed by Do Kwon. We will vigorously defend against these baseless allegations,” a Jump representative commented.
In 2023, similar accusations against the market maker were brought by the U.S. Securities and Exchange Commission. The regulator’s documents specified that Jump earned $1 billion from transactions with UST.
In December 2025, a U.S. court sentenced Kwon to 15 years in prison.