Court-appointed administrator Todd Snyder, who is handling the bankruptcy process of Terraform Labs, filed a lawsuit against Jane Street, a trading company operating in international markets, and some of its executives. The lawsuit, filed in federal court in Manhattan, names the company and its co-founder Robert Granieri and employees Bryce Pratt and Michael Huang. Snyder claimed in the lawsuit that Jane Street further deepened the collapse in the Terra ecosystem with confidential inside information.
Claims and Litigation Process
In the case file, it was claimed that Jane Street sold a large amount of tokens hours before the Terra ecosystem began to collapse, using critical information she obtained from some people affiliated with Terraform Labs. It was stated that Jane Street is a large trading company known for its effectiveness in crypto markets, and has been working with Terraform since 2018, but there has been a significant increase in its activities in 2022.
According to the complaint from Snyder, who is overseeing the bankruptcy process, the company’s relationship with Terra deepened when Jane Street reconnected with former colleagues of Bryce Pratt, a former Terraform intern. It is claimed that these new contacts allow the transfer of trade secrets through the “back door,” as Snyder puts it.
Allegedly Played a Role in Terra Collapse
In May 2022, the Terra ecosystem began to unravel when the value of the company’s algorithmic stablecoin, TerraUSD, lost its stability. Following this incident, approximately $40 billion in market value was erased and the company filed for bankruptcy in 2024. Do Kwon, co-founder of Terraform Labs, later pleaded guilty to two counts of fraud in the US and was sentenced to 15 years in prison.
In the lawsuit, it was stated that Jane Street sold large amounts of tokens just before the Terra ecosystem was thrown into complete chaos. Snyder claimed that Jane Street was able to dispose of her position worth millions of dollars at a critical time, thanks to the special information she obtained.
Allegations of Market Manipulation and Use of Inside Information
Another important detail noted in the case documents was the transactions that took place on May 7, 2022. Accordingly, Terraform Labs withdrew 150 million TerraUSD from its liquidity pool without any announcement. Minutes after this move, Jane Street made a record-sized transaction in the same pool and disposed of 85 million TerraUSD. Snyder argued that this process triggered a huge sales wave, causing the system to enter a crisis spiral.
Additionally, the lawsuit states that Jane Street continued to use privileged information she obtained as the crisis deepened. Snyder claimed that the conversations held in the private chat group established between Pratt and Do Kwon directly influenced his buying and selling decisions.
Terraform Labs Plan Administrator Office stated that a lawsuit was filed against Jane Street on charges of “insider trading, market manipulation and misleading trading practices” and claimed that these activities contributed to the crash in May 2022.
It is observed that the outcome of this case is closely followed in the industry, especially in terms of transparency and compliance with market regulations of large-scale crypto trading companies.
