Jane Street Accused of Insider Trading That Accelerated $40B Terra Collapse

## The Lawsuit Terraform Labs' court-appointed administrator Todd Snyder has filed a bombshell lawsuit against high-frequency trading giant **Jane Street Group**, its co-founder **Robert Granieri**, and employees **Bryce Pratt** and **Michael Huang** in Manhattan federal court. The lawsuit accuses Jane Street of using **material nonpublic information** from Terraform insiders to execute trades that "would have been impossible without inside information to which it had unique access." ## The Timeline: May 7, 2022 - **Terraform Labs** quietly withdrew **$150 million in UST** from Curve Finance's 3pool - **Within 10 minutes**, a wallet linked to Jane Street withdrew **$85 million in UST** from the exact same pool — before any public announcement - This triggered **panic selling** that undermined confidence in UST - UST began losing its dollar peg, setting off a **death spiral** ## The Insider: Bryce Pratt At the center is **Bryce Pratt**, a former Terraform Labs intern who joined Jane Street in September 2021. The lawsuit alleges Pratt served as a **backchannel**, providing Jane Street with confidential information about Terraform's operations. On May 9, as UST's depeg worsened, Pratt messaged Do Kwon directly offering to purchase Bitcoin or Luna. ## $40 Billion Destroyed The Terra collapse became crypto's most devastating event: - **$40 billion** in market cap evaporated in one week - UST crashed to near zero, Luna went from $80+ to worthless - Cascade: **Three Arrows Capital** → **Voyager** → **Celsius** → **FTX** ## The "Morning Massacre" Theory Market speculation suggests Jane Street executed **daily algorithmic BTC sales at 10 AM Eastern** for months. Some traders believe the firm paused this strategy amid legal proceedings, explaining Bitcoin's sudden recovery to $70,000. ## Jane Street's Response Jane Street called the lawsuit "desperate" and "a transparent attempt to extract money," vowing to defend "vigorously against these baseless claims." ## Key Facts - Jane Street earned **$24 billion** in Q4 2025 - Terraform administrator also sued **Jump Trading** for **$4 billion** - Do Kwon serving **15-year prison sentence** - FBI investigated chats between Jane Street, Jump, and Alameda Research *Sources: CoinDesk, DL News, WSJ, CrowdFund Insider*