TL;DR
- Terraform's bankruptcy administrator Todd Snyder has sued Jane Street Group and three named employees for alleged insider trading related to the LUNA/UST collapse in May 2022
- The core of the accusations is that Jane Street withdrew 85 million TerraUSD from a liquidity pool less than ten minutes after Terraform's secrecy program had done the same
- Jane Street dismisses everything as “desperate” and “baseless,” blaming fraud by Terraform's own leaders
- The lawsuit follows a similar four-billion-dollar case against Jump Trading in December 2025
Bankruptcy Estate Attacks Market Maker
Barely four years after the Terra ecosystem imploded with losses estimated at 40 billion dollars, the bankruptcy administration of Terraform Labs is intensifying its legal offensive. On February 23, 2026, a summons was filed in federal court in Manhattan against Jane Street Group LLC, the company's co-founder Robert Granieri, and employees Bryce Pratt and Michael Huang, according to court documents reported by CryptoPotato.
The lawsuit is led by administrator Todd Snyder, who is seeking damages, disgorgement of profits, and interest costs. A jury trial has been requested.
“Jane Street misused market relationships to rig the market in its favor during one of the most consequential events in crypto history” — Terraform Labs' Bankruptcy Administration
Key Evidence: Ten Minutes That Decided Everything
The cornerstone of the accusations is a specific event on May 7, 2022. According to the summons, Terraform Labs at 5:44 PM EST withdrew 150 million TerraUSD from Curve3pool — a crucial liquidity pool for stable cryptocurrencies — without informing the market.
Within ten minutes, a crypto wallet allegedly linked to Jane Street is said to have withdrawn an additional 85 million TerraUSD from the same pool. The bankruptcy administration claims that the timing cannot be explained as a coincidence and that it presupposes prior knowledge of Terraform's opaque operation.
The Secret Group Chat
The lawsuit also points to a communication channel that allegedly enabled the information exchange. Bryce Pratt, who had been an intern at Terraform Labs before joining Jane Street in September 2021, is alleged in the summons to have re-established contact with former colleagues at Terraform and created a group chat titled “Bryce's Secret.” Participants allegedly included Terraform's head of business development and a software engineer.
The bankruptcy administration characterizes this as a “back channel” for confidential information about the company.
Jane Street: “Desperate and Baseless”
Jane Street has reacted firmly. In a statement reported by CryptoPotato, the firm describes the lawsuit as “desperate,” “baseless,” and a “transparent attempt to extract money.” The company states that the losses suffered by Terra and Luna holders were due to “billion-dollar fraud” committed by Terraform's own leadership, and warns that it will defend itself vigorously.
It is worth noting that Jane Street is one of the world's most profitable quantitative trading firms. According to available financial information, the company generated 6.9 billion dollars in net profit in the second quarter of 2025 alone, and its equity base is estimated at 45 billion dollars by the end of 2025.
Part of a Larger Pattern
The lawsuit against Jane Street is not the first of its kind. In December 2025, the same bankruptcy administration filed a four-billion-dollar case against crypto trading firm Jump Trading, with similar accusations of market manipulation and secret agreements to artificially support TerraUSD.
What Happens Next?
The case will be heard in federal court in Manhattan. No date for the main hearing has been set. It is important to emphasize that the accusations are currently unproven claims from the bankruptcy estate — the courts must determine whether insider trading or market manipulation actually occurred.
Regardless of the outcome, the lawsuit sheds new light on the regulatory gray area in which quantitative trading firms operated during the peak of the crypto boom, and could have implications for how market makers handle information they receive through market relationships in the future.
