TLDR
- Terraform Labs’ bankruptcy administrator Todd Snyder has sued trading firm Jane Street for alleged insider trading during the 2022 Terra collapse
- Jane Street is accused of using private information from Terraform insiders to sell hundreds of millions in tokens before the crash became public
- Within 10 minutes of Terraform quietly pulling 150 million TerraUSD from a liquidity pool, a Jane Street-linked wallet sold 85 million TerraUSD into the same pool
- The lawsuit claims this triggered the death spiral that wiped out $40 billion in market value
- Jane Street denies all allegations, calling the suit “baseless” and “desperate”
Terraform Labs’ court-appointed bankruptcy administrator has filed a lawsuit against high-frequency trading firm Jane Street, claiming the firm used insider information to trade ahead of the 2022 Terra ecosystem collapse.
🚨 THE BIGGEST CRYPTO MYSTERY HAS FINALLY BEEN RESOLVED.
Who crashed Luna and UST to 0 and brought down the entire crypto market in 2022?
Jane Street.
The same Jane Street accused of "10AM manipulation" also front-ran the 2022 Terra collapse.
In February 2026, the Terraform… pic.twitter.com/E6yeWpcAXI
— Ash Crypto (@AshCrypto) February 24, 2026
Todd Snyder filed the suit in Manhattan federal court on Monday. The defendants include Jane Street co-founder Robert Granieri and employees Bryce Pratt and Michael Huang.
The lawsuit says Jane Street accessed material non-public information through back-channel connections with Terraform insiders. It accuses the firm of using that information to exit large positions at exactly the right time.
CRYPTO IN THE COURTS: Terraform Labs Administrator Sues Jane Street for Role in LUNA Death Spiral – Inner City Press story: https://t.co/WO0QO8OJHJ 83-page complaint filed today in SDNY on Patreon here: https://t.co/cGTBIKigJ0 pic.twitter.com/eHo2HToOK2
— Inner City Press (@innercitypress) February 24, 2026
Terraform Labs was founded in 2018 by Do Kwon and Daniel Shin. The company built the Terra blockchain and its algorithmic stablecoin, TerraUSD, which was designed to maintain a 1:1 peg with the US dollar.
In May 2022, TerraUSD lost that peg. The Luna token crashed to near zero within days. Around $40 billion in market value was wiped out in under a week.
The lawsuit says the chain of events began on May 7, 2022, when Terraform quietly withdrew 150 million TerraUSD from Curve3pool, a decentralized stablecoin trading platform, without any public announcement.
The 10-Minute Trade
According to Snyder, within 10 minutes of that withdrawal, a wallet linked to Jane Street sold 85 million TerraUSD into the same pool. The suit calls this Jane Street’s largest-ever single swap.
Snyder claims this trade helped trigger a fire sale of TerraUSD that accelerated the stablecoin’s collapse. The lawsuit says Jane Street continued trading on inside information as the token fell further.
The connection between Jane Street and Terraform goes back to 2018, when Terraform onboarded the firm for trading. Activity increased sharply in 2022 after Bryce Pratt, a former Terraform intern, reconnected with his old colleagues.
Pratt is accused of setting up a private communication channel with Terraform’s business development lead, which the suit describes as a “back-channel source for material non-public information.”
Do Kwon’s Involvement
On May 9, with TerraUSD slipping, Pratt sent a group message to Do Kwon and his team offering to buy Bitcoin or Luna. Kwon’s response referenced Jump Trading’s co-founder Bill DiSomma and the firm’s fundraising activity.
Terraform filed for bankruptcy in January 2024. Do Kwon was later arrested and pleaded guilty to two counts of fraud. He was sentenced to 15 years in prison in December 2024.
Snyder is seeking damages, disgorgement, and interest from Jane Street at a jury trial.
Jane Street has denied all claims. A spokesman for the firm said: “This desperate suit is a transparent attempt to extract money when it is well-established that the losses suffered by Terra and Luna holders were the result of a multibillion-dollar fraud perpetrated by the management of Terraform Labs.”
The case is being heard in Manhattan federal court.
