TLDR
- Court-appointed bankruptcy administrator files federal lawsuit against Jane Street alleging insider trading tied to Terra/Luna’s May 2022 implosion
- Lawsuit claims former Terraform intern working at Jane Street shared confidential company data through a group chat named “Bryce’s Secret”
- Trading firm allegedly pulled 85 million UST from Curve’s 3pool mere minutes after Terraform’s undisclosed withdrawal, reportedly dodging over $200M in losses
- Separately, India’s SEBI banned Jane Street from domestic securities trading in 2025 over index manipulation allegations involving approximately $4.3 billion in gains
- Jane Street refutes both accusations, describing the cryptocurrency case as “desperate” and labeling the SEBI investigation as “biased”
A court-appointed bankruptcy administrator for Terraform Labs has initiated legal proceedings against prominent trading firm Jane Street, claiming the company leveraged insider knowledge to generate profits during the catastrophic $40 billion Terra/Luna market crash in May 2022.
The legal action was initiated on February 23 in New York’s Southern District federal court. Named defendants include Jane Street co-founder Robert Granieri along with staff members Bryce Pratt and Michael Huang.
Pratt completed a summer internship at Terraform Labs in 2021 before transitioning to Jane Street that September. By early 2022, he had established a group messaging channel titled “Bryce’s Secret” that connected Terraform engineers with business development personnel.
According to the complaint, one Terraform engineer messaged: “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 mechanism without making any public disclosure. Remarkably, within just 10 minutes, an account associated with Jane Street extracted 85 million UST from the identical pool — representing the single largest transaction the platform had ever recorded.
According to the complaint, this transaction “would have been impossible without inside information.” Administrator Todd Snyder contends Jane Street exploited this privileged knowledge to liquidate hundreds of millions in UST positions ahead of the market’s dramatic collapse.
TerraUSD broke from its dollar peg shortly thereafter. The companion token Luna experienced a catastrophic death spiral that obliterated approximately $40 billion in market capitalization over several days.
The Allegations in Detail
The legal filing encompasses 13 separate charges including insider trading, securities fraud, violations of the Commodity Exchange Act, unjust enrichment, and breach of confidential information. The administrator demands monetary damages, profit disgorgement, and a trial by jury.
Significant portions of the complaint remain redacted. Critical financial data and internal correspondence are currently sealed from public view.
Jane Street has categorically rejected all accusations, characterizing the lawsuit as a “desperate” and “transparent attempt to extract money.” The firm maintains that losses resulted from the “multibillion-dollar fraud perpetrated by the management of Terraform Labs.”
Terraform founder Do Kwon received a 15-year prison sentence in December 2025 following convictions for wire fraud and criminal conspiracy.
Jane Street Also Faces Indian Regulators
The Terraform litigation represents only one component of Jane Street’s current legal challenges. In July 2025, India’s Securities and Exchange Board (SEBI) prohibited Jane Street from participating in Indian securities markets, claiming the firm systematically manipulated the BANKNIFTY and NIFTY 50 indices across 18 derivative expiration dates spanning January 2023 through March 2025.
SEBI estimated total profits from the purported manipulation scheme at approximately $4.3 billion and froze roughly $566 million in alleged illicit gains.
Jane Street characterized the SEBI investigation as “biased” and filed an appeal. The associated hearing was postponed on February 25, 2026 — coinciding with the week the Terraform complaint was filed.
The trading firm also serves as one of four authorized participants for BlackRock’s iShares Bitcoin Trust, holding approximately $790 million in reported IBIT shares as of Q4 2025.
Additional litigation filed in December 2025 accuses Jump Trading of orchestrating a clandestine agreement to purchase Luna at $0.40 while market prices stood at $110.
