Crypto Investor Sues Jump Trading and Zhang Yongfeng for Over $500 Million, Alleges Fraud in Terra Collapse

The Whale's Fight Back: From 1000x Gains to a Half-Billion Dollar Lawsuit

Hu Zhewen, a figure known within cryptocurrency circles, once cemented his reputation with an early, staggering bet on Stratis that yielded returns exceeding 1000x. However, his subsequent forays into major market trends have led him into a legal battle seeking reparations for losses he claims were precipitated by fraud.

The Terra Collapse: A Fortune Unmade in Days

Between May 2021 and May 2022, Hu deployed approximately $80 million to build a massive position in the once-high-flying algorithmic stablecoin TerraUSD (UST) and its sister token, LUNA. At its peak, this holding ballooned in value to over $800 million. The catastrophic de-pegging and collapse of the Terra ecosystem in May 2022 virtually wiped out this fortune, with LUNA's price plummeting to near zero.

Legal Action Targets Jump Trading and Executives

In response to these losses, Hu has initiated a high-stakes lawsuit in Chicago, USA. The defendants include the prominent trading firm Jump Trading, along with related companies and executives. The suit alleges misconduct surrounding the Terra ecosystem events and demands at least $500 million in damages. This case directly implicates a major traditional finance player in a crypto market failure, drawing significant scrutiny.

A Separate Case: Allegations Against Zhang Yongfeng

Hu's legal offensive extends to another front. He has filed a separate suit against entrepreneur Zhang Yongfeng. The complaint states that Hu invested $1 million in a token issued by an entity founded by Zhang. That token has since crashed, losing over 99.6% of its value from a 2025 high. Hu accuses Zhang of multiple counts, including securities fraud, seeking compensation through the courts.

These concurrent lawsuits, both ongoing, transcend a single investor's quest for restitution. Their outcomes could help define new boundaries for accountability and regulatory expectations for institutions operating in the digital asset space, setting potential precedents for the entire industry.