Jump Trading Responds to Terraform's $4 Billion Lawsuit, Calling Allegations an Attempt to "Shift Responsibility"

Gate News reports that Jump Trading is counterattacking with a $4 billion lawsuit on Monday, following Terraform Labs restructuring chief Todd Snyder’s accusations that Jump and several subsidiaries and executives manipulated the market, defrauded investors, and engaged in self-trading. Jump stated that the lawsuit is an obvious attempt to shift Terraform’s $4.4 billion penalty and debt liability imposed by the U.S. Securities and Exchange Commission (SEC) onto itself.

Terraform Labs is a notorious project in cryptocurrency history. Its Terra blockchain, along with the stablecoin UST and token LUNA, collapsed in 2022, triggering the bankruptcy of FTX and increased regulatory scrutiny. The founder, Do Kwon, was sentenced to 15 years in prison, resulting in approximately $40 billion in investor losses. Snyder’s lawsuit alleges that Jump executives assisted in the fraud during Terraform’s operations but have yet to be punished, hence the request for $4 billion in damages.

The lawsuit states that the fraud began in 2021 when UST lost its peg to the dollar. Jump reportedly intervened by buying large amounts of UST to maintain the peg but did not disclose its actions to investors. Jump responded that the lawsuit does not specify the exact conduct of each defendant, does not clarify where the illegal activities occurred, and some charges are beyond the statute of limitations, thus should be dismissed.

Additionally, Snyder recently sued Jane Street and its co-founder Robert Granieri, accusing them of profiting from insider information. Jane Street emphasized that the lawsuit is baseless and will vigorously defend its rights. Overall, Jump Trading and other high-frequency trading firms have responded to the major crypto lawsuit, once again drawing market attention to institutional trading and the risks in the crypto market.