Table of Contents
ToggleJump Trading officially responded to the lawsuit filed by Todd Snyder, the bankruptcy trustee of Terraform Labs, on Monday (March 25). Snyder filed the lawsuit last December against Jump Trading, several of its subsidiaries, and two executives, accusing them of market manipulation, investor fraud, and self-dealing, seeking damages of up to $4 billion.
In its announcement, Jump Trading was ruthless, calling the lawsuit "an attempt by Snyder to evade transparency in the $4.4 billion fine imposed on Terraform Labs by the U.S. Securities and Exchange Commission (SEC)," and stating that Snyder "fabricated a series of allegations aimed at shifting Terraform's responsibilities to the SEC and its creditors onto the defendant."
Three reasons to request rejection: vague details, lack of location, and exceeding the time limit.
Jump Trading further pointed out three fatal flaws in the lawsuit:
First, the complaint lacks key details and fails to specify what each defendant did; second, it does not specify the location where the alleged misconduct occurred; third, and most importantly, the case has exceeded the statute of limitations and should be dismissed according to law.
If these three points hold true, the lawsuit may not even have the chance to enter the substantive trial stage.
UST decoupling in 2021: Jump secretly intervenes to support the market.
The core background of this lawsuit dates back to the first UST decoupling incident in May 2021.
According to previous court records, Jump Trading assisted Terraform Labs in maintaining the dollar peg of UST by buying large amounts of UST to support its price—but executives from both sides deliberately kept this a secret, and the outside world was completely unaware of it. This secret market-stabilizing operation later became one of the key pieces of evidence in the SEC's indictment against Do Kwon and Terraform for misleading investors for a long period before the collapse in 2022.
In June 2024, the SEC reached a settlement with Terraform Labs and Do Kwon, imposing a $4.47 billion fine, the highest ever recorded in cryptocurrency enforcement history. In January 2025, Do Kwon was sentenced to 15 years in prison on two counts of fraud.
Terraform Labs subsequently declared bankruptcy, and Todd Snyder took over as trustee. He filed a $4 billion claim against Jump Trading, alleging that Jump's actions in 2021 constituted market manipulation, causing investors to continue holding UST and LUNA due to information asymmetry, ultimately resulting in huge losses in the 2022 crash.
Jump Crypto has drastically reduced its size, but old debts are still accumulating.
It's worth noting that Jump Crypto, Jump Trading's cryptocurrency division, had already significantly scaled back its operations in 2023, almost disappearing from the crypto market. However, this lawsuit shows that the traces of operations left on-chain back then do not disappear simply because of business contraction.
Currently, both sides are taking a hard line in the legal arena: Snyder argues that Jump was complicit in Terraform's collapse, while Jump insists it is a scapegoat. Whether this lawsuit will proceed to substantive trial will depend on how the court determines the statute of limitations and the adequacy of the complaint.
