Terraform Liquidators Allege Jump Trading Helped Fuel Crypto’s Biggest Crash: Explosive Report
New allegations throw a grenade into crypto's most infamous collapse. Liquidators claim a major market maker didn't just watch the fire—they poured gasoline on it.
The Anatomy of an Implosion
Forget simple market forces. The latest legal filings paint a picture of coordinated pressure—alleging actions that turned a correction into a catastrophe. It's the kind of maneuver that makes old-school pump-and-dump schemes look quaint.
Numbers Don't Lie, But People Do
The report hinges on trading data and communication trails. Liquidators aren't dealing in rumors; they're presenting a timeline where certain trades allegedly accelerated the death spiral. It's finance at its most cynical—profiting from the wreckage you helped create.
Regulatory Reckoning Looms
This isn't just about one failed stablecoin anymore. The allegations, if proven, could redefine what 'market manipulation' means in the digital age. Watch for regulators to suddenly discover a long-lost sense of urgency.
The crypto ecosystem's biggest crash keeps getting more complicated. And the final bill might land on some very surprising desks.
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Terra’s Death Spiral And The Contagion That Followed
Terraform’s collapse still hangs over the market. TerraUSD, known as UST, was billed as a stablecoin that WOULD hold $1 through an algorithm tied to its sister token, Luna, known as LUNA. When UST broke its peg in May 2022, the mechanism unraveled and both tokens spiraled toward near zero in days.
The wipeout erased about $40B in value and rippled across the industry, squeezing lenders, funds, and exchanges that had treated UST yields and Luna liquidity as DEEP and durable.
Three Arrows Capital was among the first major casualties, with later failures piling up as confidence and collateral evaporated.
Terraform filed for bankruptcy in Jan. 2024, and public filings show the estate has recovered about $300M so far for creditors as it unwinds what remains.
Claims Of Peg Support And Profits From Terra’s Fall
Snyder’s complaint says Jump entered a secret arrangement to support TerraUSD’s peg before the final break and later walked away from the wreckage with outsized gains.
Regulators have previously pointed to Jump’s trading in Luna, with the SEC saying in court filings that Jump made about $1B in profit by selling the token.
The suit lands after a bruising year for Terraform’s former leadership. The company and Kwon agreed to a roughly $4.5B settlement with the SEC in 2024 following a jury verdict on securities fraud claims.
Kwon, once a celebrity founder who mocked critics as UST scaled, pleaded guilty in August 2025 and a New York federal judge sentenced him to 15 years in prison last week.
