TLDR
- Jane Street has been sued by Terraform’s bankruptcy representative for purported insider trading connected to Terra/Luna’s May 2022 implosion
- An ex-Terraform intern working at Jane Street reportedly shared privileged details with traders through a chat named “Bryce’s Secret”
- The firm purportedly extracted 85 million UST from Curve’s 3pool mere minutes after Terraform’s undisclosed withdrawal, reportedly dodging over $200M in losses
- SEBI has banned Jane Street from India’s securities markets in 2025 for suspected index manipulation generating approximately $4.3 billion in gains
- The trading firm rejects both accusations, labeling the cryptocurrency case “desperate” and dismissing SEBI’s investigation as “biased”
A court-designated bankruptcy representative for Terraform Labs has launched federal litigation against prominent trading house Jane Street, claiming the firm exploited inside knowledge to generate profits during the catastrophic $40 billion Terra/Luna meltdown in May 2022.
The legal action was initiated on February 23 in New York’s Southern District court. Named defendants include Jane Street’s co-founder Robert Granieri alongside staff members Bryce Pratt and Michael Huang.
Pratt completed an internship with Terraform Labs during summer 2021 before transitioning to Jane Street that September. Three months later, he established a group conversation dubbed “Bryce’s Secret” featuring Terraform’s engineering team and business development personnel.
According to one message referenced in court documents, a Terraform engineer stated: “bro we all know who the buyer is. its where u work… Jane Streeeeeeeet.”
The core allegation centers on events of May 7, 2022. Terraform discreetly withdrew 150 million UST from Curve’s 3pool liquidity mechanism without making any public disclosure. A wallet connected to Jane Street extracted 85 million UST from that identical pool within a mere 10-minute window — representing the platform’s largest individual transaction to that point.
According to the filing, executing that trade “would have been impossible without inside information.” Administrator Todd Snyder contends Jane Street leveraged privileged data to liquidate hundreds of millions in UST positions ahead of the market’s catastrophic decline.
TerraUSD’s dollar peg crumbled in the following days. Luna, its companion token, spiraled into oblivion, erasing approximately $40 billion in total market capitalization within a matter of days.
The Allegations in Detail
The legal complaint encompasses 13 separate charges spanning insider trading, securities fraud, violations of the Commodity Exchange Act, unjust enrichment, and confidentiality breaches. Plaintiffs are demanding compensation, profit recovery, and a jury proceeding.
Significant portions of the filing remain redacted. Critical financial data and internal correspondence are currently sealed from public view.
Jane Street has categorically denied every accusation, characterizing the lawsuit as a “desperate” and “transparent attempt to extract money.” The company asserted that financial damages stemmed from the “multibillion-dollar fraud perpetrated by the management of Terraform Labs.”
Terraform’s creator Do Kwon received a 15-year prison sentence in December 2025 for wire fraud and conspiracy charges.
Jane Street Also Faces Indian Regulators
This litigation represents just one front in Jane Street’s expanding legal challenges. During July 2025, India’s financial watchdog SEBI prohibited Jane Street from participating in Indian securities trading, claiming the firm systematically manipulated BANKNIFTY and NIFTY 50 benchmark indices across 18 derivative settlement dates spanning January 2023 through March 2025.
SEBI estimated the suspected manipulation scheme generated roughly $4.3 billion in unlawful profits and froze approximately $566 million in associated earnings.
Jane Street dismissed SEBI’s investigation as “biased” and filed an appeal. That proceeding was postponed on February 25, 2026 — coinciding with the same week Terraform’s lawsuit emerged.
The trading operation also serves as one of four authorized participants for BlackRock’s iShares Bitcoin Trust, holding approximately $790 million in disclosed IBIT positions during Q4 2025.
A distinct lawsuit initiated in December 2025 alleges Jump Trading orchestrated a covert arrangement to acquire Luna at $0.40 while market prices stood at $110.
