- The bankruptcy liquidator of crypto company Terraform Labs has sued Jane Street in New York, accusing the company of insider trading and front-running surrounding the 2022 Terra collapse.
- At the heart of the lawsuit are UST transactions on the verge of collapse, possible non-public information, and direct contacts with Terraform employees.
The bankruptcy liquidator of Terraform Labs is taking legal action against Jane Street. In a lawsuit in New York, he accuses the financial giant of trading on insider information and accelerating the collapse of the Terra ecosystem in 2022.
It was submitted Complaint on Monday, February 23, 2026, in a federal court in Manhattan. The plaintiff is Todd Snyder, the court-appointed wind-up administrator for Terraform Labs. In addition to Jane Street, co-founder Robert Granieri and employees Bryce Pratt and Michael Huang are also named as defendants.
The partly redacted statement of claim concerns, among other things, the accusation of having used material nonpublic information. There is also suspicion of front-running in connection with the collapse of TerraUSD (UST) and LUNA. As is well known, the crash triggered the Bitcoin and crypto winter in 2022.
Was Jane Street involved in the crypto crash?
The focus is on the hot phase shortly before the collapse. According to lawsuit details cited in media reports, Terraform withdrew approximately 150 million UST from the Curve3pool on May 7, 2022 at 5:44 p.m. EST. Less than ten minutes later, a wallet associated with Jane Street is said to have withdrawn another 85 million UST from the same pool.
The central point of the lawsuit: The first deduction was not yet publicly known at that time. Snyder therefore argues that Jane Street may have had an informational advantage.
Additionally, the lawsuit reportedly references direct communication channels between Jane Street and Terraform employees. Among other things, a chat called “Bryce’s Secret” is mentioned. Snyder deduces that it was not just about normal business relationships, but also possibly an informal source of crypto market-moving information.
Snyder formulates the accusation as follows:
“Jane Street abused market relationships to manipulate the market in his favor in one of the most consequential events in crypto history. On behalf of those injured, we will pursue all avenues supported by the facts and law against those who exploited their position and made significant profits at the expense of Terraform Labs’ creditors.”
Jane Street firmly denies the allegations. A spokesman told Reuters:
“This desperate lawsuit is a transparent attempt to obtain money, even though it has long been established that the losses suffered by Terra and Luna owners were the result of a multi-billion dollar fraud by the management of Terraform Labs. We will vigorously defend ourselves against these baseless, opportunistic allegations.”
The collapse of Terraform is estimated to have destroyed around $40 billion in market value in 2022, setting off a chain reaction in the industry. As a result, FTX, BlockFi and other US crypto companies, among others, went bankrupt. Terraform itself filed for bankruptcy in January 2024.
In addition, the company agreed to a $4.47 billion settlement with the U.S. Securities and Exchange Commission after a jury found liability for fraud.
As early as December 2025, he sued Jump Trading and other people in a US federal court in Illinois and demanded around $4 billion. In this lawsuit, he accuses Jump of not only profiting from the Terra ecosystem, but also contributing to its eventual collapse through allegedly secret support measures for UST and advantageous insider agreements. Jump also rejects the allegations.
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