Jump’s motion to dismiss the $4 billion Terra lawsuit

The timeline

• December 18, 2025: Plan Administrator Todd Snyder filed Snyder v. Jump Trading, LLC, No. 1:25-cv-15414, in the U.S. District Court for the Northern District of Illinois. The complaint seeks at least $4 billion.
• March 23, 2026: Jump entities and co-founder William DiSomma filed motions asking the court to dismiss the complaint.
• April 15, 2026: At the parties’ joint request, the court terminated those motions as moot and set a sequence for an amended complaint and renewed motions.
• May 1, 2026: The Plan Administrator filed an amended complaint, partly under seal.
• July 8, 2026: The Delaware bankruptcy court modified a protective order so specified Jump-produced documents could be used in the Illinois action.
• August 28, 2026 source review: The amended complaint remained the operative pleading, and no merits decision on the dismissal arguments had been identified in the sources reviewed.

Why Terra creditors watch this case

The Jump action is one of the estate’s largest stated attempts to bring value back for creditors. The amended complaint alleges that Jump secretly supported the UST peg during an early depeg in May 2021, received LUNA at substantial discounts under undisclosed arrangements, and received Bitcoin then worth roughly $1.5 billion from Luna Foundation Guard reserves during the May 2022 collapse.

Those are the Plan Administrator’s allegations, not findings by a court. Jump denies wrongdoing. A company spokesperson characterized the action as an attempt to shift responsibility for Terraform’s conduct.

The amount requested in a complaint is not money available for distribution. A claim may be narrowed, dismissed, settled, tried, appealed, or ultimately yield no net recovery after time and costs. Still, the size of the requested relief makes the proceeding relevant to the range of possible creditor outcomes.

What a motion to dismiss means

A motion to dismiss is an early-stage request to end a case—or parts of it—before discovery and trial. At this stage, the court generally tests whether the complaint states legally viable claims and pleads them with the required specificity.

Three broad outcomes are possible:

1. The motion is denied and the case proceeds.
2. The motion is granted with permission to amend.
3. The motion is granted with prejudice, ending the affected claims subject to appeal.

A denial does not prove the allegations. A dismissal does not necessarily establish that the underlying factual allegations are false.

Jump’s principal arguments

Who did what. The March motion argued that the complaint grouped multiple affiliated companies together as “Jump” without adequately identifying each entity’s alleged conduct. Fraud claims in federal court are subject to heightened pleading requirements.

Where and when. Jump argued that the complaint did not sufficiently identify where alleged conduct occurred, which can affect governing law and whether a particular court may hear the claims.

Timing. Jump argued that the claims were brought after applicable limitation periods had expired. The alleged conduct largely dates from 2019 through May 2022, while the original complaint was filed in December 2025. The parties dispute when the relevant clocks began to run and whether exceptions apply.

Responsibility. Jump framed the case as an attempt to shift responsibility for Terraform’s own liability. The Plan Administrator’s position is the opposite: that the estate is pursuing parties it alleges profited while investors absorbed losses.

William DiSomma filed a separate motion, including an argument that the Illinois court lacked personal jurisdiction over him.

The amended complaint and document dispute

The first dismissal motions never reached a decision. On April 15, 2026, Judge Joan Lefkow terminated them as moot after the parties agreed that the Plan Administrator would file an amended complaint. An amended complaint replaces the original, so any dismissal challenge must address the new pleading.

The May 1 amended complaint relied in part on documents Jump had produced in the Delaware bankruptcy case under a protective order. Judge Lefkow temporarily stayed the Illinois action and directed the Plan Administrator to ask the bankruptcy court to clarify whether those documents could be used.

On July 8, 2026, Bankruptcy Judge Brendan Shannon modified the protective order to permit specified documents to be used in the Illinois action, including in the amended complaint. Questions about confidentiality designations were left to the Illinois court. This cleared the procedural obstacle over use of the documents; it did not decide whether the amended complaint’s allegations are true.

Where the case stood at the source review

As of the August 28, 2026 review reflected in this article, no judge had ruled on the substance of the dismissal arguments. The original post-amendment schedule was interrupted by the stay, and the case required a reset schedule after the Delaware ruling.

The next material events include renewed dismissal briefing, any decision on sealed material, and a ruling on which claims—if any—may proceed. A denial would ordinarily move the case toward discovery; a partial dismissal would narrow it; and a full dismissal could lead to an appeal.

Complex federal proceedings are commonly measured in years rather than months unless resolved by settlement. A dismissal ruling is an early gate, not the finish line.

What it means for Crypto Loss Claim holders

The Jump case is a potential source of value for the estate, not a promised recovery. A ruling in either direction may change the range and timing of possible outcomes, but it does not change an individual holder’s Allowed CLC Amount or set a distribution date.

Holding a claim remains a valid choice for creditors comfortable with an open timeline and case risk. A transfer is the alternative: an allowed claim may be exchanged for a defined amount now, subject to verification and written terms. Some qualifying offers may include contingent participation in specified future recoveries, but only the signed agreement controls.

Sources

1. Snyder v. Jump Trading, LLC, No. 1:25-cv-15414 — free docket mirror, including Complaint, ECF 1; March dismissal motions, ECF 45–46; April 15 order, ECF 51; Amended Complaint, ECF 56; stay order, ECF 77; and June minute entries, ECF 79–80. PACER is the official federal docket.
2. Terraform Labs public bankruptcy docket: Plan Administrator’s motion concerning the protective order, D.I. 1223; Jump’s partial objection, D.I. 1231; and the July 8, 2026 order, D.I. 1275.
3. The Block — report on the filing (December 19, 2025).
4. DL News — report on Jump’s dismissal position (March 24, 2026).

TerraCreditor is not affiliated with or endorsed by the U.S. Bankruptcy Court, U.S. Trustee, Plan Administrator, Wind Down Trust, or claims agent. TerraCreditor is affiliated with TerraClaim and may receive referral compensation if a referred transaction is completed. This article is informational and is not legal, investment, tax, or financial advice. Source-reviewed August 28, 2026. Verify time-sensitive details against the official dockets.