TLDR
- Unsealed court filings allege Jane Street traders joked internally about an “informational advantage” before dumping $192 million of TerraUSD (UST) in May 2022.
- A former Terraform intern named Bryce Pratt allegedly ran a secret Telegram group called “Bryce’s Secret” that included Terraform staff, giving Jane Street access to insider information.
- Jane Street allegedly exited its UST position nine minutes after Terraform quietly withdrew $150 million from a key liquidity pool, earning roughly $134 million in profits from subsequent short positions.
- After the trade, Jane Street traders reportedly discussed “decommissioning” their wallets after a crypto analytics firm identified them on-chain.
- Five days after UST hit its lowest point, Jane Street allegedly offered a job to Terraform’s head of research, who started two weeks later.
The estate of Terraform Labs has filed an amended lawsuit against Wall Street trading firm Jane Street, alleging the firm used insider information to dump $192 million of TerraUSD before the stablecoin collapsed in May 2022.
🚨This could be the largest insider trading scandal in crypto history.
Jane Street made $134 million by shorting Luna and UST right before the Terra collapse.
Newly unsealed court filings reveal that Jane Street did not just use their insider information to close their UST… pic.twitter.com/oCjcLkDOwJ
— Bull Theory (@BullTheoryio) May 21, 2026
The amended complaint was filed in Manhattan federal court and contains fewer redactions than the original February 2026 filing. It adds new details about internal communications, post-trade behaviour, and a previously undisclosed job offer.
The Secret Telegram Group
At the center of the allegations is a former Terraform intern, Bryce Pratt, who joined Jane Street in September 2021. According to the filing, Pratt set up a private Telegram channel called “Bryce’s Secret” in February 2022.
The group reportedly included Terraform’s head of business development and a senior software engineer. The filing claims Pratt used the channel to gather “defi info” about Terraform’s assets, strategies, and liquidity needs.
The complaint alleges that in one internal exchange, traders were told they should be “slightly pleased” about having an “informational advantage.” The estate argues this shows Jane Street understood it was receiving material non-public information, not just better market analysis.
The Nine-Minute Window
On May 7, 2022, at 5:44 PM Eastern Time, Terraform Labs quietly withdrew 150 million UST from the Curve 3pool, a key liquidity venue for the stablecoin.
Less than nine minutes later, a wallet now identified in the lawsuit as belonging to Jane Street removed 85 million UST from the same pool. The filing describes this as the single largest individual trade in the sequence that pushed UST off its dollar peg.
In total, Jane Street exited roughly 192 million UST tokens near par value. The firm then built short positions as the algorithmic stablecoin collapsed. According to the estate, Jane Street made approximately $134 million in profit as Terra’s $40 billion ecosystem collapsed over the following days.
Decommissioning Wallets
After the trade, a crypto analytics firm reportedly contacted a Jane Street associate and mentioned the firm had “made a killing” on Terra’s collapse.
Internal communications cited in the filing show Jane Street traders grew alarmed about their wallets being identified on-chain. They allegedly discussed how to “decommission” the wallets — abandoning the linked addresses and replacing them with new ones to restore anonymity.
The estate argues this reaction points to consciousness of guilt. It says traders with nothing to hide would not have panicked about wallet identification.
The Job Offer
Five days after UST hit its lowest point, on May 18, 2022, Jane Street allegedly offered a job to Terraform’s head of research. He reportedly started two weeks later.
The estate frames this hire as part of a broader pattern of cultivating access to Terraform insiders, alongside Pratt’s earlier internship and the Telegram channel.
Jane Street Denies All Allegations
Jane Street has denied the claims. In its April 2026 motion to dismiss, the firm called the lawsuit a “transparent attempt to extract money.” It argued that losses were caused by Do Kwon’s fraud, not its own trading, and that the Wagoner Rule protects it from being sued by the bankruptcy estate.
The amended complaint now invokes both federal securities laws and the Commodity Exchange Act, broadening the potential liability. The motion to dismiss is still pending. This case runs alongside a separate $4 billion lawsuit filed against Jump Trading in December 2025 for allegedly propping up UST before withdrawing support.
