Jump Trading Faces $4 Billion Terraform Administrator Suit

The administrator overseeing the wind-down of Do Kwon’s Terraform Labs has filed a lawsuit against Jump Trading, alleging the Chicago-based firm illegally profited from — and helped to accelerate — its 2022 collapse.

“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,” the administrator said in post on X Friday.

“The action aims to recover value for creditors and hold Jump responsible for exploiting the ecosystem, leaving unsuspecting investors to bear the losses,” the post said.

Terraform unraveled in 2022 when its algorithmic stablecoin TerraUSD lost its dollar peg, triggering a death spiral that also wiped out its sister token Luna. The combined $40 billion wipeout devastated investors globally and set off a chain reaction of failures across the crypto industry, ultimately contributing to the downfall of Sam Bankman-Fried’s FTX exchange.

“This is a desperate attempt by Terraform Labs to shift blame and financial responsibility away from the crimes that Do Kwon committed,” a Jump spokesperson said in a statement. “We will defend ourselves vigorously against these baseless claims.”

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

The Wall Street Journal reported news of the lawsuit earlier.

Terraform, a digital-asset business co-founded by Kwon, filed for Chapter 11 bankruptcy protection in the US in January last year. Kwon was earlier this month sentenced to 15 years in prison for the fraud that led to the company’s collapse.

Top photo: The Terra Luna stablecoin logo on a smartphone arranged in the Brooklyn borough of New York, on Monday, May 16, 2022. The collapse of the Terra ecosystem, and the tokens Luna and UST, will go down as one of the most painful and devastating chapters in crypto history. Photographer: Gabby Jones/Bloomberg.