Jane Street Lawsuit: Accelerating Terraform's Collapse Through Domestic Trading

Todd Snyder, the court-appointed liquidator of Terraform Labs, has filed a massive lawsuit against Jane Street and several of its employees in a New York federal court. The case accuses the parties of engaging in insider trading, a practice believed to have accelerated Terraform’s collapse.

Liquidator Announces Lawsuit Over Illegal Trading

According to the Wall Street Journal, the lawsuit highlights Jane Street’s role as a key player in exploiting sensitive internal data from Terraform Labs. The targets are Jane Street founder Robert Granieri and two other employees. This quantitative trading firm is suspected of using insider information to gain an unfair advantage in the market, harming the company during its most critical moments.

Non-Public Information and Access to Private Channels

The core of the lawsuit centers on how Jane Street obtained confidential Terraform information. Court documents reveal that access to sensitive data was gained through private communication channels established by Bryce Pratt, a former Terraform intern. On May 7, 2022, when Terraform withdrew $150 million worth of TerraUSD from the Curve protocol liquidity pool, Jane Street responded swiftly. In less than 10 minutes, they also withdrew $85 million UST, a transaction indicating deep knowledge of Terraform’s internal movements.

Impact of Insider Trading on Terraform’s Collapse

The plaintiffs claim that this series of strategic transactions was not mere coincidence but part of a coordinated trading pattern to exploit—and even accelerate—Terraform’s instability. The large-scale sell-offs based on non-public information are alleged to have significantly contributed to market pressure that led to the ecosystem’s downfall. This lawsuit represents the liquidator’s effort to hold accountable those believed to have profited from the crisis using privileged information.