TLDR
- Terraform’s bankruptcy administrator filed suit against Jane Street alleging insider trading connected to the May 2022 Terra/Luna crash
- An ex-Terraform intern working at Jane Street allegedly shared privileged data with traders through a group chat named “Bryce’s Secret”
- Jane Street reportedly pulled 85 million UST from Curve’s 3pool just 10 minutes after Terraform’s undisclosed withdrawal, reportedly dodging over $200M in potential losses
- India’s SEBI issued a ban against Jane Street from Indian securities markets in 2025 following allegations of index manipulation yielding approximately $4.3 billion in gains
- Jane Street contests all claims in both legal matters, labeling the crypto case “desperate” and describing the SEBI investigation as “biased”
A court-appointed bankruptcy administrator for Terraform Labs has initiated federal legal action against major trading firm Jane Street, alleging the company exploited privileged information to gain advantages during the $40 billion Terra/Luna market crash in May 2022.
The legal filing arrived February 23 in the Southern District of New York. The complaint identifies Jane Street co-founder Robert Granieri alongside employees Bryce Pratt and Michael Huang.
Pratt completed an internship at Terraform Labs during summer 2021, then transitioned to Jane Street that September. By February 2022, he had established a group chat titled “Bryce’s Secret” containing Terraform engineers and business development personnel.
The complaint quotes one message from a Terraform engineer stating: “bro we all know who the buyer is. its where u work… Jane Streeeeeeeet.”
The lawsuit’s primary accusation centers on events of May 7, 2022. Terraform discreetly withdrew 150 million UST from Curve’s 3pool liquidity pool without making any public disclosure. A wallet associated with Jane Street removed 85 million UST from that identical pool within 10 minutes — representing the largest individual swap the platform had ever executed.
According to the complaint, this transaction “would have been impossible without inside information.” Administrator Todd Snyder asserts Jane Street leveraged this knowledge to exit hundreds of millions in UST positions ahead of the market’s downfall.
TerraUSD broke from its dollar peg several days afterward. Luna, its companion token, commenced a catastrophic decline that eliminated approximately $40 billion in market capitalization over a matter of days.
The Allegations in Detail
The legal action encompasses 13 separate counts addressing insider trading, securities fraud, Commodity Exchange Act violations, unjust enrichment, and breach of confidence. The administrator requests damages, profit disgorgement, and a jury trial.
Significant portions of the complaint remain redacted. Critical profit calculations and internal correspondence stay under seal.
Jane Street rejected all accusations, characterizing the lawsuit as a “desperate” and “transparent attempt to extract money.” The firm attributed losses to the “multibillion-dollar fraud perpetrated by the management of Terraform Labs.”
Terraform founder Do Kwon received a 15-year prison sentence in December 2025 for wire fraud and conspiracy.
Jane Street Also Faces Indian Regulators
This legal challenge represents one of multiple regulatory issues confronting Jane Street. India’s market regulator SEBI issued a ban in July 2025 preventing Jane Street from participating in Indian securities markets, alleging the firm manipulated BANKNIFTY and NIFTY 50 indices across 18 derivative expiry dates spanning January 2023 through March 2025.
SEBI determined profits of approximately $4.3 billion resulted from the purported manipulation scheme and froze roughly $566 million in alleged gains.
Jane Street characterized the SEBI investigation as “biased” and filed an appeal. That proceeding received an adjournment on February 25, 2026 — during the same week the Terraform legal action was filed.
The firm maintains status as one of four authorized participants for BlackRock’s iShares Bitcoin Trust, holding approximately $790 million in reported IBIT shares according to Q4 2025 data.
Another lawsuit initiated in December 2025 alleges Jump Trading engaged in a confidential arrangement to purchase Luna at $0.40 while the market price stood at $110.
