Terraform Administrator Sues Jane Street, Alleging Insider Trading Before Terra Collapse

Nearly four years after the collapse of TerraUSD wiped out tens of billions of dollars in value, the official charged with recovering money for Terraform Labs’ creditors has turned his attention to one of Wall Street’s largest trading firms. Todd Snyder, the court-appointed administrator winding down Terraform, has sued Jane Street, accusing the firm of using inside information to trade ahead of the stablecoin’s failure in May 2022.

The complaint was filed on Monday, February 23, in federal court in Manhattan, according to Bloomberg Law. It names Jane Street Group, co-founder Robert Granieri, and two employees, Bryce Pratt and Michael Huang. The filing is heavily redacted. Jane Street has rejected the claims.

What the lawsuit alleges

Snyder’s central claim is that Jane Street had a private line into Terraform and used it to protect itself while other market participants were left exposed. The complaint says the firm used nonpublic information to front-run trading that hastened Terraform’s collapse, and that this let it unwind hundreds of millions of dollars in potential exposure just hours before the ecosystem fell apart.

According to DL News, the suit alleges that Pratt, who interned at Terraform before joining Jane Street full time in September 2021, acted as a backchannel between the two companies. The complaint argues that Jane Street made trades that would have been impossible without inside information to which it had unique access.

The most specific allegation concerns May 7, 2022, the day TerraUSD began to slip from its dollar peg. As reported by Crowdfund Insider, the complaint says Terraform withdrew about $150 million of UST from the Curve Finance 3pool, a large liquidity pool used to trade stablecoins. Roughly ten minutes later, before any public notice, a wallet linked to Jane Street allegedly pulled about $85 million of UST from the same pool. The suit argues this added to the selling pressure that broke the peg. It also claims that on May 9, as the crisis deepened, Pratt messaged Terraform founder Do Kwon offering to buy bitcoin or LUNA.

Snyder is seeking damages, disgorgement of profits and interest on behalf of Terraform’s creditors. In a statement cited by Crowdfund Insider, he said Jane Street abused its market relationships to rig the market in its favor and that his office would pursue every available avenue against those who profited at creditors’ expense.

Jane Street calls the suit desperate

Jane Street has denied wrongdoing. In comments reported by The Wall Street Journal and repeated by DL News, the firm described the complaint as desperate and said it would defend itself vigorously against what it called baseless, opportunistic claims. A spokesperson also argued that the losses suffered by Terraform investors were caused by a multibillion-dollar fraud carried out by Terraform’s own management.

That argument leans on a record that is already well established. Kwon pleaded guilty to fraud charges in August 2025 and was sentenced to 15 years in prison in December. Terraform itself went through bankruptcy in 2024, and Snyder was appointed to wind down its affairs and distribute what remains to creditors.

None of the allegations in the new complaint have been tested in court. The case will now move through the usual early stages, including any motion to dismiss Jane Street may file.

Part of a wider recovery effort

The Jane Street case is the second major lawsuit Snyder has brought against a trading firm over the Terra collapse. In December 2025 he sued Jump Trading, several of its affiliates and two executives, seeking about $4 billion. That case is still pending.

Together, the suits suggest the Terraform estate is trying to recover money not only from the company’s insiders but also from sophisticated firms that it says were positioned to see trouble coming. If that strategy succeeds, it could increase the amount eventually returned to creditors, many of them retail investors who held UST or LUNA when prices collapsed.

Why it matters for crypto

The Terra collapse was one of the defining events of the last crypto bear market. Its failure erased roughly $40 billion in market value within days and set off a chain of losses that contributed to the downfall of lenders and funds exposed to the tokens, and ultimately to the collapse of FTX later that year.

For crypto readers, the lawsuit matters for two reasons. First, it reopens questions about how much large market makers knew during the crisis and whether they traded on information others did not have. Market makers provide much of the liquidity in crypto trading, often under private arrangements with token issuers, and the case puts those relationships under a spotlight.

Second, the case lands at a sensitive time for the market. Crypto prices have been under heavy pressure this month, and sentiment indicators have been at extreme lows. Questions about the conduct of major trading firms, whether or not they are ultimately proven, add to the uncertainty facing traders and the institutions that serve them.

The outcome could also shape how bankruptcy estates pursue third parties after future crypto failures. A ruling that allows insider trading claims against a market maker to proceed would give administrators in other cases a template for similar suits. A dismissal would make that path harder.

For now, the complaint is a set of allegations, and Jane Street has signaled it intends to fight them in full.