Terraform Sues Jane Street Over Alleged Insider Trades Before TerraUSD Crash

Highlights:

• Terraform is suing Jane Street over alleged use of non-public information during the 2022 Terra collapse.
• The lawsuit claims large TerraUSD trades happened minutes after a major liquidity withdrawal.
• The bankruptcy administrator is seeking damages and a jury trial to recover funds for creditors.

Terraform Labs has sued trading firm Jane Street, alleging the firm used non-public information during the May 2022 Terra collapse to protect its positions. Todd Snyder filed the lawsuit in Manhattan federal court as the court-appointed administrator overseeing Terraform’s bankruptcy. He also named co-founder Robert Granieri and employees Bryce Pratt and Michael Huang. The complaint accuses them of misappropriating confidential information and manipulating market prices.

Terraform Labs looks for scapegoats in its collapse.

The administrator overseeing the liquidation of Terraform Labs has filed a lawsuit against trading firm Jane Street.

He accused the firm of insider trading that accelerated the collapse of Do Kwon’s Terra-Luna empire.… pic.twitter.com/hKLSb34bpr

— TU_Crypto_News (@TU_Crypto_News) February 24, 2026

According to the filing, Jane Street began onboarding Terraform for trading services in 2018. However, Snyder claims significant Terra token trading activity did not expand until 2022. He links that shift to Pratt, who had previously interned at Terraform. Snyder states that Pratt reconnected with former colleagues and reopened communication channels. He also alleges that Pratt established contact with Terraform’s business development lead.

Snyder describes communication as a source of material non-public information. He claims the firm relied on those contacts to guide large token sales. The complaint alleges that Jane Street reduced hundreds of millions of dollars in potential exposure shortly before the ecosystem collapsed. Snyder argues that those trades occurred hours before TerraUSD lost its peg. He claims the firm acted while the broader market lacked the same information.

Snyder stated, “Jane Street abused market relationships to rig the market in its favor during one of the most consequential events in crypto history.” 

Terraform Sues Jane Street Over What Happened During the Terra Meltdown

The lawsuit focuses on activity that began on May 7, 2022. On that day, Terraform withdrew 150 million TerraUSD from Curve’s 3pool liquidity pool. The company did not publicly announce the withdrawal at that time. Snyder alleges that within ten minutes, a wallet linked to Jane Street sold 85 million TerraUSD into the same pool. He describes that transaction as the firm’s largest single TerraUSD swap.

The complaint claims that the sale increased pressure inside the liquidity pool. TerraUSD then slipped below its one-dollar peg. As the peg weakened, redemptions accelerated across exchanges. Luna, the sister token that supported the algorithmic system, declined sharply. Within days, the Terra ecosystem erased about $40 billion in market value.

The collapse led to increased volatility, and investors tried to exit positions. The liquidity situation became strained in lending and derivatives markets. Some companies that were exposed to Terra incurred losses around that time. The broader crypto crash intensified later in 2022, including the fall of FTX.

What Each Side Wants from the Court

Snyder is demanding that Jane Street pay damages, profits disgorgement, and interest. He also demanded a trial by jury. He said that he wants to restore value to creditors via the bankruptcy process. Terraform declared bankruptcy in January 2024.

The case against Jane Street is preceded by a separate lawsuit brought against Jump Trading by Snyder in late December. In that case, he accused Jump of unlawfully profiting and materially contributing to the Terra breakdown.

The administrator overseeing the wind-down of Terraform Labs has sued high-frequency trading firm Jump Trading, alleging it unlawfully profited from and helped contribute to the collapse of Do Kwon’s crypto empire. The filing seeks $4 billion in damages from Jump, co-founder…

— Wu Blockchain (@WuBlockchain) December 19, 2025

Do Kwon later pleaded guilty in the United States to two fraud charges related to Terraform. A court sentenced him to 15 years in prison in December. Jane Street maintains that it will contest the allegations and defend its conduct in federal court.