{"id":92383,"date":"2025-12-19T10:03:01","date_gmt":"2025-12-19T07:03:01","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=92383"},"modified":"2025-12-22T11:04:17","modified_gmt":"2025-12-22T08:04:17","slug":"jump-trading-accused-of-direct-involvement-in-terras-collapse","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/jump-trading-accused-of-direct-involvement-in-terras-collapse\/","title":{"rendered":"Jump Trading accused of direct involvement in Terra&#8217;s collapse"},"content":{"rendered":"<p>Todd Snyder, the administrator overseeing the liquidation of Terraform Labs, has accused <a href=\"https:\/\/forklog.com\/en\/news\/what-is-a-market-maker\">market maker<\/a> Jump Trading of directly contributing to <a href=\"https:\/\/forklog.com\/en\/news\/terras-death-spiral-how-and-why-luna-and-ust-collapsed\">the collapse of Do Kwon&#8217;s company<\/a>.\u00a0<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">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.\u2026<\/p>\n<p>\u2014 Terra \ud83c\udf0d Powered by LUNA \ud83c\udf15 (@terra_money) <a href=\"https:\/\/twitter.com\/terra_money\/status\/2001856896521908256?ref_src=twsrc%5Etfw\">December 19, 2025<\/a><\/p><\/blockquote>\n<p> <script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>He has demanded $4 billion in damages from Jump, its co-founder William DiSomma, and the president of its cryptocurrency division, Kanav Kariya.\u00a0<\/p>\n<h2 class=\"wp-block-heading\">Secret Agreements<\/h2>\n<p>According to court documents cited by <a href=\"https:\/\/www.wsj.com\/finance\/currencies\/jump-accused-of-contributing-to-collapse-of-terraform-do-kwons-crypto-empire-890c3f27\">The Wall Street Journal<\/a>, since 2019, a series of secret agreements existed between the market maker and Terraform. One such agreement allowed Jump to purchase <a href=\"https:\/\/forklog.com\/en\/news\/what-is-terra-luna\">LUNA<\/a> at $0.4 when the market price of the asset reached $110.<\/p>\n<p>The parties also had an informal agreement to support the TerraUSD exchange rate. Jump committed to artificially maintaining the <a href=\"https:\/\/forklog.com\/en\/news\/what-are-algorithmic-stablecoins\">algorithmic stablecoin&#8217;s<\/a> peg to the dollar, concealing these actions from regulators and the community to avoid scrutiny.<\/p>\n<p>In May 2021, the <a href=\"https:\/\/forklog.com\/en\/news\/what-are-stablecoins\">&#8220;stablecoin&#8221;<\/a> lost its peg but recovered after secret support from Jump, Snyder claims. The market maker misled investors by stating that the asset&#8217;s price had recovered due to the algorithm&#8217;s work. In reality, the return to $1 was ensured by TerraUSD purchases made by the company.\u00a0<\/p>\n<p>Once the vulnerability of the stablecoin mechanism was acknowledged, Jump succeeded in removing the <span data-descr=\"the process of gradually unlocking tokens according to a predetermined schedule\" class=\"old_tooltip\">vesting<\/span> period in contracts. This allowed the firm to sell LUNA monthly and profit from it, exacerbating the pressure on the token.\u00a0<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><em>&#8220;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,&#8221; Snyder emphasized.\u00a0<\/em><\/p>\n<\/blockquote>\n<p>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&#8217;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.\u00a0<\/p>\n<p>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&#8217;s issues, competitors began actively selling TerraUSD and Luna.<\/p>\n<p>It is separately noted that in December 2024, Jump&#8217;s subsidiary, Tai Mo Shan, paid $123 million to settle claims regarding transactions with Terraform in 2021. During <a href=\"https:\/\/forklog.com\/en\/news\/us-doj-opens-probe-into-terrausd-collapse\">interrogations<\/a> at the <span data-descr=\"U.S. Securities and Exchange Commission\" class=\"old_tooltip\">SEC<\/span>, Kariya and DiSomma &#8220;hundreds of times&#8221; refused to testify, citing the right against self-incrimination. Kariya left Jump in 2024.<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><em>&#8220;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,&#8221; a Jump representative commented.\u00a0<\/em><\/p>\n<\/blockquote>\n<p>In 2023, similar accusations against the market maker were <a href=\"https:\/\/forklog.com\/en\/news\/wsj-jump-trading-earned-1-billion-from-ust-trades\">brought<\/a> by the U.S. Securities and Exchange Commission. The regulator&#8217;s documents specified that Jump earned $1 billion from transactions with UST.\u00a0<\/p>\n<p>In December 2025, a U.S. court <a href=\"https:\/\/forklog.com\/en\/news\/do-kwon-sentenced-to-15-years-in-prison\">sentenced<\/a> Kwon to 15 years in prison.\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"<p>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&#8217;s company.<\/p>\n","protected":false},"author":1,"featured_media":92384,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"","_short_excerpt_text":"Todd Snyder accused Jump Trading of aiding Terra's collapse.","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[1162,1373,852],"class_list":["post-92383","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-court-cases","tag-jump-trading","tag-terra"],"aioseo_notices":[],"amp_enabled":true,"views":"307","promo_type":"1","layout_type":"1","short_excerpt":"Todd Snyder accused Jump Trading of aiding Terra's collapse.","is_update":"","_links":{"self":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/92383","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/comments?post=92383"}],"version-history":[{"count":2,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/92383\/revisions"}],"predecessor-version":[{"id":92394,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/92383\/revisions\/92394"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media\/92384"}],"wp:attachment":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media?parent=92383"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/categories?post=92383"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/tags?post=92383"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}