Jane Street enjoyed ‘impossible‘ insider advantage amid $40bn Terra collapse, lawsuit alleges

Another day, another insider trading allegation.

On Tuesday, the administrator overseeing Terraform Labs’ winding down filed a lawsuit against the high-powered, high-frequency trading firm Jane Street, its co-founder Robert Granieri, and two employees named Michael Huang and Bryce Pratt.

Todd Snyder, the administrator overseeing the disgraced crypto firm’s liquidation, alleged that Jane Street used material nonpublic information to profit from Terraform’s collapse.

The heavily redacted lawsuit claims that the trading firm was able to profit from “trades that would have been impossible without inside information to which it had unique access.”

Jane Street, which earned more than $24 billion in the last quarter of 2025, told the Wall Street Journal the complaint was “desperate” and said it would defend itself “vigorously against these baseless, opportunistic claims.”

Terrform Labs went bankrupt in 2024 after its algorithmic stablecoin, called UST, lost its peg to the dollar and collapsed two years prior.

The depegging event set off a chain reaction that swept up individual investors in the project and culminated in the collapse of the crypto exchange FTX, along with other crypto firms with exposure to UST and its native cryptocurrency, LUNA.

In total, Terraform Labs and its cocksure founder, Do Kwon, cost investors some $40 billion in losses.

Kwon now serves a 15-year prison sentence for fraud.

Who is Bryce Pratt?

Pratt sits at the centre of the administrator’s allegation. He worked as an intern for Terraform Labs before joining Jane Street as a full-time employee in September 2021.

Given his work at Terraform, the complaint alleges that Pratt provided backchannel communication between the two firms.

The lawsuit alleges that Jane Street used this backchannel to exploit material non-public information about Terraform.

“Using that insider information, Jane Street sold off its [REDACTED] UST at the opportune moment — on May 7, 2022 — to maximise its own profits and avoid substantial losses,” the suit reads.

The firm’s sale came hours before the stablecoin had depegged and sent the Terraform ecosystem into a “death spiral.”

“This case is about settling accounts,” the lawsuit concludes. “It is about ensuring some measure of accountability in the wake of Terraform’s collapse.“

In December, Snyder also filed a lawsuit against the Chicago-based firm Jump Trading, alleging the company played an outsized role in the collapse of Terra.

He accused Jump, several of its subsidiaries, and two of its executives of market manipulation, defrauding investors, self-dealing and more.

That lawsuit, which seeks $4 billion in damages, is ongoing.

Liam Kelly is DL News’ Berlin-based DeFi correspondent. Have a tip? Get in touch at [email protected].