Terraform Labs Administrator Accuses Jane Street of Insider Trading in Terra Collapse

The court appointed administrator overseeing the bankruptcy of Terraform Labs has filed a lawsuit against Jane Street, alleging insider trading and market manipulation tied to the 2022 collapse of the Terra ecosystem. The complaint, filed in Manhattan federal court by administrator Todd Snyder, names Jane Street co-founder Robert Granieri and employees Bryce Pratt and Michael Huang.

The lawsuit claims the trading firm misappropriated confidential information obtained through alleged connections with Terraform insiders. According to the filing, Jane Street used material non-public information to execute large token sales that intensified the downward spiral of TerraUSD and related tokens.

Terraform’s ecosystem imploded in May 2022 after TerraUSD, an algorithmic stablecoin, lost its dollar peg, triggering a market-wide collapse that erased an estimated $40 billion in value. The company later filed for bankruptcy, and co-founder Do Kwon was sentenced to prison on fraud charges.

Allegations of Timely Token Sales Before Crash

The complaint alleges that on May 7, 2022, Terraform withdrew 150 million TerraUSD from a liquidity pool without public disclosure. Within minutes, Jane Street allegedly sold 85 million TerraUSD into the same pool, accelerating the sell-off.

Jane Street has denied wrongdoing, calling the claims baseless and attributing investor losses to Terraform’s internal failures. Snyder is seeking damages and disgorgement through a jury trial.

Disclaimer

This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.