Jump Trading has formally moved back against the $4 billion lawsuit brought by the Terraform Labs bankruptcy trust, asking the court to throw out the case. The firm said the action is an attempt to shift responsibility tied to Terraform's SEC penalty of more than $4 billion onto outside defendants.
Jump says the complaint is defective on three fronts
In its response filed on March 25, Jump Trading argued that the complaint fails in three basic ways. First, it does not spell out what each defendant allegedly did. Second, it does not identify where the supposed misconduct took place. Third, and most important to Jump's motion, the claims are allegedly barred by the statute of limitations.
If the court agrees with those arguments, the dispute may not proceed to a full merits stage. Jump also accused trustee Todd Snyder of constructing allegations designed to move liability away from Terraform Labs and onto the firms and executives named in the suit.
The case centers on UST's 2021 depeg episode
The underlying dispute traces back to May 2021, when UST first lost its peg. Earlier court records indicated that Jump Trading helped Terraform Labs support UST's dollar peg by buying large amounts of the token, while the arrangement was kept from the public at the time.
That intervention later became part of the SEC's case that Do Kwon and Terraform misled investors before the 2022 collapse. Regulators treated the undisclosed support as important evidence in showing that market participants did not have a complete picture of UST's condition and risk.
SEC settlement and bankruptcy set up the new claim
In June 2024, the SEC reached a settlement with Terraform Labs and Do Kwon carrying a $4.47 billion penalty, described in the source material as the largest in crypto enforcement history. Terraform later entered bankruptcy, and Todd Snyder took over as trustee.
Then, in January 2025, Do Kwon was sentenced to 15 years in prison on two fraud counts. Snyder later sued Jump Trading, several affiliates, and two executives, alleging market manipulation, investor fraud, and wash trading. The complaint claims those actions kept investors holding UST and LUNA under unequal information conditions before the 2022 collapse caused heavy losses.
Past crypto activity remains under legal scrutiny
Jump Crypto had already sharply reduced its operations in 2023, but the lawsuit shows that earlier trading activity is still being examined in court. Snyder's position is that Jump was tied to the conduct behind Terraform's collapse. Jump rejects that framing and says it is being used as a substitute target for losses and regulatory exposure that belong to Terraform.
The next step is likely to turn on whether the court finds the complaint timely and sufficiently specific. That threshold decision will determine whether the case advances.