Terraform Labs Sues Jane Street for Alleged Insider Trading Before Terra-Luna Collapse
On February 23, 2026, Terraform Labs’ liquidation administrator Todd Snyder filed a lawsuit against Jane Street, co-founder Robert Granieri, and employees Bryce Pratt and Michael Huang, accusing them of insider trading that accelerated the 2022 Terra-Luna collapse, per Wall Street Journal.
Snyder claims Jane Street used non-public information from Terraform insiders to front-run trades, profiting at the expense of creditors during one of crypto’s most devastating events.
“Jane Street abused market relationships to rig the market in its favor during one of the most consequential events in crypto history.” — Todd Snyder, Terraform Labs Liquidation Administrator
Jane Street strongly denied the allegations, calling the collapse a “multibillion-dollar fraud” by Terraform management and vowing to defend the “opportunistic claims” vigorously.
Core Allegations in the Complaint
According to the WSJ report and complaint:
- Former Terraform employee Bryce Pratt (now at Jane Street) maintained communication channels with Terraform insiders, including software engineers and the head of business development.
- These channels allegedly provided non-public information about Terraform’s operations and token movements.
- One key example: On May 7, 2022, Terraform withdrew 150 million TerraUSD from Curve3pool without public announcement. Within 10 minutes, a wallet linked to Jane Street allegedly withdrew 85 million TerraUSD from the same pool.
Snyder argues the timing and undisclosed nature of these actions enabled Jane Street to profit from TerraUSD’s impending depeg and Luna’s collapse.
Connection to Jump Trading Lawsuit
The complaint also implicates Jump Trading:
- Snyder previously sued Jump and its executives in December 2025, alleging they entered a backdoor deal to inflate TerraUSD before its death spiral.
- The Jane Street lawsuit claims Jump leaked some non-public information to Jane Street.
- On May 9, 2022 (during the depeg), Pratt reportedly messaged Do Kwon and Jane Street representatives expressing interest in bidding on Luna or Bitcoin, with Kwon referring to Jump co-founder Bill DiSomma regarding a Terraform fundraise
Background: Terra-Luna Collapse (2022)
The TerraUSD (UST) algorithmic stablecoin depegged in May 2022, triggering a death spiral that erased over $40 billion in market value and contributed to widespread bankruptcies in crypto lending (e.g., Celsius, Three Arrows Capital).
- Terraform Labs filed for bankruptcy in 2024.
- Agreed to pay $4.47 billion to the SEC in penalties.
- Founder Do Kwon pleaded guilty to two criminal counts in August 2025 and was sentenced to 15 years in U.S. prison in December 2025.
Current Status & Potential Implications
- The lawsuit is ongoing; no court rulings have been issued yet.
- If proven, it would represent one of the largest insider trading cases in crypto history.
- It also highlights continued litigation efforts by Terraform’s liquidation team to recover funds for creditors.
Bitcoin and broader crypto markets showed no immediate reaction to the filing, with BTC trading around $113,000 and ETH near $4,070 (as of February 23, 2026).
