Key Takeaways
- Recent court documents suggest Jane Street traders referenced having an “informational advantage” before liquidating $192 million worth of TerraUSD (UST) in May 2022.
- A former Terraform intern, Bryce Pratt, allegedly operated a private Telegram channel dubbed “Bryce’s Secret” featuring Terraform employees, potentially providing Jane Street with non-public intelligence.
- Jane Street reportedly liquidated its UST holdings just nine minutes after Terraform silently removed $150 million from a critical liquidity pool, subsequently profiting approximately $134 million through short positions.
- Following the trades, Jane Street personnel allegedly discussed “decommissioning” their blockchain wallets after a crypto intelligence company traced them on-chain.
- Merely five days after UST reached its nadir, Jane Street allegedly extended an employment offer to Terraform’s research director, who commenced work two weeks thereafter.
The bankruptcy estate representing Terraform Labs has submitted an amended legal complaint against prominent trading house Jane Street, asserting the firm exploited confidential information to liquidate $192 million in TerraUSD shortly before the stablecoin’s catastrophic failure in May 2022.
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Filed in Manhattan’s federal district court, the revised complaint features significantly fewer redactions compared to the initial February 2026 submission. The updated filing incorporates fresh evidence regarding private communications, actions taken after executing trades, and a previously concealed employment proposition.
The Private Telegram Channel
Central to these accusations is former Terraform intern Bryce Pratt, who transitioned to Jane Street in September 2021. The legal filing contends that Pratt established a confidential Telegram group titled “Bryce’s Secret” during February 2022.
This group allegedly comprised Terraform’s business development chief and a principal software engineer. The estate maintains Pratt utilized this channel to obtain “defi info” concerning Terraform’s holdings, operational strategies, and liquidity requirements.
The complaint asserts that internal communications reveal traders being informed they should feel “slightly pleased” regarding their “informational advantage.” The estate contends this demonstrates Jane Street’s awareness it was receiving privileged, non-public intelligence rather than merely superior market insights.
The Critical Nine-Minute Timeline
On May 7, 2022, precisely at 5:44 PM Eastern Time, Terraform Labs discreetly extracted 150 million UST from the Curve 3pool, an essential liquidity platform for the stablecoin.
Fewer than nine minutes afterward, a wallet currently attributed in the lawsuit to Jane Street withdrew 85 million UST from the identical pool. The filing characterizes this as the most substantial individual transaction in the series that destabilized UST from its dollar parity.
In aggregate, Jane Street exited approximately 192 million UST tokens at near-par valuation. The firm subsequently established short positions as the algorithmic stablecoin disintegrated. Per the estate’s calculations, Jane Street generated roughly $134 million in gains as Terra’s $40 billion ecosystem imploded during subsequent days.
Wallet Decommissioning Discussions
Following the transaction, a cryptocurrency analytics company allegedly reached out to a Jane Street affiliate and noted the firm had “made a killing” from Terra’s downfall.
Internal messages referenced in the filing demonstrate Jane Street traders became concerned about their wallets being tracked on the blockchain. They purportedly discussed methods to “decommission” these wallets — abandoning the associated addresses and generating new ones to regain anonymity.
The estate maintains this response indicates awareness of wrongdoing. It asserts traders conducting legitimate activities would not have reacted anxiously to wallet identification.
The Employment Proposition
Merely five days following UST’s bottoming out, on May 18, 2022, Jane Street allegedly presented an employment offer to Terraform’s research director. He purportedly began his position two weeks subsequently.
The estate characterizes this recruitment as component of a systematic effort to develop connections with Terraform personnel, complementing Pratt’s previous internship and the Telegram communication channel.
Jane Street Refutes All Claims
Jane Street has categorically rejected these allegations. In its April 2026 dismissal motion, the firm labeled the lawsuit a “transparent attempt to extract money.” It maintained that damages resulted from Do Kwon’s fraudulent conduct, not its trading activities, and that the Wagoner Rule shields it from estate litigation.
The revised complaint now references both federal securities regulations and the Commodity Exchange Act, expanding potential exposure. The dismissal motion remains under judicial consideration. This legal action proceeds concurrently with a distinct $4 billion lawsuit initiated against Jump Trading in December 2025 for allegedly supporting UST before withdrawing assistance.
