Jane Street has been accused in a fresh civil lawsuit of using insider information to sell UST in a way that allegedly accelerated TerraUSD’s depeg on May 7, 2022, helping trigger the death spiral that wiped out roughly $40 billion in value.
The plaintiff is Todd R. Snyder, the court-appointed administrator overseeing Terraform Labs’ bankruptcy wind-down; Terraform filed for Chapter 11 in 2024 after the 2022 collapse. Defendants include Jane Street Group LLC, Jane Street Capital LLC, co-founder Robert Granieri, and employees Bryce Pratt and Michael Huang.
Bryce Pratt (a Jane Street employee since September 2021) had previously interned at Terraform in summer 2021. The suit claims he maintained backchannel communications via Telegram, with messages like “don’t share pls” with Terraform insiders, including the Head of Research and others, providing material non-public information (MNPI) on UST stability, liquidity plans, and ecosystem health.
This allegedly violated Terraform’s internal policies. Terraform Labs quietly withdrew ~150 million UST from Curve’s 3pool; a major liquidity pool for UST. Minutes later, a wallet linked to Jane Street allegedly withdrew and sold ~85 million UST from the same pool—the largest single swap at the time.
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This rapid outflow is claimed to have triggered immediate panic selling, unbalancing the pool and accelerating the break of UST’s $1 peg. Jane Street allegedly sold off hundreds of millions in UST exposure “hours before” the full depeg became public and “at the opportune moment,” maximizing profits and avoiding losses.
The complaint states: “Within hours of Jane Street selling its UST holdings, UST was depegged from $1 and the entire Terraform ecosystem… was in a death spiral.” UST fell below $0.80 shortly after, triggering Luna’s hyperinflation via the algorithmic mint and burn mechanism, with Luna crashing toward zero.
The suit accuses Jane Street of insider trading, fraud, market manipulation, and front-running, seeking disgorgement of profits, damages (compensatory, punitive, etc.), and fees to benefit creditors and victims. It frames this as hastening and contributing to—not solely causing—the collapse.
Connection to the 2022 Crypto Winter
The Terra and Luna implosion was one of the biggest single-event triggers for the broader 2022 crypto bear market (“crypto winter”). It erased ~$40–60 billion in market value almost overnight, sparked contagion; runs on other projects, Three Arrows Capital bankruptcy, Celsius freeze, eroded confidence, and set the stage for FTX’s later collapse.
The market had already been softening since late 2021, but Terra’s failure marked a sharp acceleration into deep winter territory. On-chain researchers in early 2023 had already flagged a wallet (“Wallet A”) active in the May 7 UST depeg trades as likely tied to Jane Street based on flows, prior funding links, etc.
Jane Street was also reportedly involved in bailout discussions around that time. Jane Street has strongly denied everything, calling the lawsuit “desperate,” “baseless,” and “opportunistic” in statements to the Wall Street Journal and others.
They argue the losses stemmed from Terraform’s own “multi-billion-dollar fraud” and structural flaws in the algorithmic stablecoin design, not their trading. They plan to defend vigorously. A similar lawsuit was filed against Jump Trading in late 2025, alleging its role in the events. This is an unproven allegation in ongoing litigation—civil suits like this often settle or drag on without a full trial.
The core Terraform collapse stemmed primarily from UST’s fragile algorithmic peg design failing under a bank-run-like stress exacerbated by high Anchor yields and declining Luna collateral value, but the suit claims Jane Street’s alleged front-running poured fuel on the fire. Crypto markets are still litigating the 2022 fallout years later.