# Terraform Labs Liquidator Blames Jump Trading for Terra-Luna Collapse

*Author: Jack Inabinet*
*Published: Dec 19, 2025*
*Source: https://www.bankless.com/read/news/terraform-labs-liquidator-blames-jump-trading-for-terra-luna-collapse*

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The bankruptcy administrator for Terraform Labs has filed a $4B lawsuit against Jump Trading, alleging it played a direct role in the collapse of the Terra-Luna crypto ecosystem.

## What's the Scoop?
- **New Accusation:** The [complaint](https://x.com/innercitypress/status/2002074538662916496?s=20), filed in Illinois, seeks $4B in damages from Jump, its co‑founder William DiSomma, and former Jump Crypto president Kanav Kariya. It alleges that Jump profited billions of dollars from a secret deal with Terraform Labs to defend the algorithmic stablecoin's peg before its ultimate failure, which wiped out $40B in value and kicked off a prolonged crypto winter.
- **SEC Corroborates:** Late last year, the SEC [fined](https://www.sec.gov/files/litigation/admin/2024/33-11349.pdf) a Jump Crypto subsidiary $123M for deceiving the investing public into believing UST was stable. The SEC found that Jump purchased $20M of UST to stabilize price in exchange for a verbal agreement with Terraform Labs that allowed Jump to fully vest locked LUNA tokens. 
- **Recent Sentencing:** Terraform Labs front man Do Kwon was recently sentenced to 15 years imprisonment. The Court called the Terra-Luna fraud as "eye popping" and "unusually serious," supported by blatant lies that wreaked unprecedented financial havoc in their wake.

> 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](https://twitter.com/terra_money/status/2001856896521908256?ref_src=twsrc%5Etfw)
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