While the crypto market has yet to fully recover from the $40 billion collapse of Terraform Labs in 2022, the case now takes a new turn with a $4 billion lawsuit. In the latest development, the court-appointed administrator of the Terraform Labs lawsuit has filed a case against Jump Trading. The case alleges that the platform engaged in market manipulation and “actively exploded” the Terraform ecosystem.
Jump Trading’s Role in Terraform Labs Lawsuit
According to a Bloomberg report, Todd Snyder, the administrator appointed by the court to oversee the Terraform Labs bankruptcy case, has sued Jump Trading. Snyder seeks $4 billion in damages from the platform, its co-founder Willian DiSomma, and ex-executive Kanav Kariya.
Notably, the administrator sees this Terraform Labs lawsuit as a necessary step to “hold Jump Trading accountable for illegal conduct that directly caused the largest crypto collapse in history.” He added in his statement,
It is noteworthy that the move comes following Terraform Labs founder Do Kwon’s prison sentence. While Kwon was expected to serve 25 years in prison initially, the court recently ordered a 15-year sentence for the “epic fraud” last week. US District Judge Paul A. Engelmayer noted,
Unveiling Jump Trading’s Alleged Secret Dealing
Snyder claims that Jump Trading had a secret engagement before the collapse of Terraform Labs. According to his complaint, the platform was engaged in market manipulation, supporting TerraUSD’s peg and later abandoning it. This resulted in substantial illicit profits for Jump. As per a previous SEC filing, the platform has gained a massive $1 billion in profits from selling those tokens.
However, a Jump spokesperson calls this $4 billion lawsuit a “desperate attempt” to put the blame on the platform, shifting the focus from Terraform and its imprisoned CEO, Do Kwon. They added that the team would stand firm together, fighting against the suit.
Previously, the 34-year-old founder of Terraform Labs had pleaded guilty to misguiding community members about the stability of the TerraUSD coin. He admitted that he had produced false statements on the token’s ability to maintain a steady price despite market volatility.
Source: https://coingape.com/terraform-labs-lawsuit-jump-trading-faces-4-billion-case/
