TLDR
- Terraform’s bankruptcy administrator sued Jane Street for alleged insider trading during the May 2022 Terra/Luna collapse
- A former Terraform intern at Jane Street allegedly fed confidential information to the trading desk via a group chat called “Bryce’s Secret”
- Jane Street allegedly withdrew 85 million UST from Curve’s 3pool within 10 minutes of Terraform’s unpublicised withdrawal, helping it avoid $200M+ in losses
- India’s SEBI separately barred Jane Street from Indian securities markets in 2025 over alleged index manipulation worth ~$4.3 billion in profits
- Jane Street denies all allegations in both cases, calling the crypto lawsuit “desperate” and the SEBI probe “biased”
Terraform Labs’ court-appointed bankruptcy administrator has filed a federal lawsuit against trading giant Jane Street, accusing it of using confidential information to profit from the $40 billion Terra/Luna collapse in May 2022.
And there it is: Jane Street was behind the 2022 crypto winter, destroying Terraform by first depegging the token and destroying the ecosystem, then pretending it would rescue Terra, while effectively it was soaking up what little value remained. pic.twitter.com/Wo9HnBHAoP
— zerohedge (@zerohedge) February 24, 2026
The lawsuit was filed February 23 in the Southern District of New York. It names Jane Street co-founder Robert Granieri and employees Bryce Pratt and Michael Huang.
Pratt interned at Terraform Labs in summer 2021 before joining Jane Street that September. By February 2022, he had set up a group chat called “Bryce’s Secret” that included Terraform engineers and business development staff.
In one message cited in the complaint, a Terraform engineer wrote: “bro we all know who the buyer is. its where u work… Jane Streeeeeeeet.”
The lawsuit’s central claim focuses on May 7, 2022. Terraform quietly removed 150 million UST from Curve’s 3pool liquidity pool without public announcement. Within 10 minutes, a wallet linked to Jane Street pulled 85 million UST from the same pool — the largest single swap the platform had processed.
The complaint states that trade “would have been impossible without inside information.” The administrator, Todd Snyder, says Jane Street used that knowledge to unwind hundreds of millions in UST exposure before the market collapsed.
TerraUSD lost its dollar peg days later. Its sister token Luna entered a death spiral that wiped roughly $40 billion in market value within days.
The Allegations in Detail
The lawsuit includes 13 counts covering insider trading, securities fraud, Commodity Exchange Act violations, unjust enrichment, and breach of confidence. It seeks damages, disgorgement of profits, and a jury trial.
The complaint is heavily redacted. Key profit figures and internal communications remain under seal.
Jane Street denied all allegations and called the lawsuit a “desperate” and “transparent attempt to extract money.” The firm said losses were caused by the “multibillion-dollar fraud perpetrated by the management of Terraform Labs.”
Terraform founder Do Kwon was sentenced to 15 years in prison in December 2025 for wire fraud and conspiracy.
Jane Street Also Faces Indian Regulators
This lawsuit is not Jane Street’s only legal trouble. In July 2025, India’s market regulator SEBI barred Jane Street from Indian securities markets, alleging it manipulated the BANKNIFTY and NIFTY 50 indices over 18 derivative expiry days between January 2023 and March 2025.
SEBI calculated profits of roughly $4.3 billion from the alleged scheme and impounded approximately $566 million in gains.
Jane Street called the SEBI probe “biased” and appealed. That hearing was adjourned on February 25, 2026 — the same week the Terraform lawsuit landed.
The firm is also one of four authorized participants for BlackRock’s iShares Bitcoin Trust, with around $790 million in reported IBIT shares as of Q4 2025.
A separate lawsuit filed in December 2025 accuses Jump Trading of a secret deal to buy Luna at $0.40 when the market price was $110.
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