Last updated on March 10th, 2026 at 11:54 am
The court-appointed administrator overseeing Terraform Labs’ bankruptcy has filed a lawsuit against the trading firm Jane Street. The lawsuit accuses the company and several of its executives of insider trading that allegedly worsened the $40 billion collapse of the Terra ecosystem.
Todd Snyder, overseeing Terraform’s bankruptcy proceedings, filed the complaint in a Manhattan federal court on Monday. The suit names Jane Street co-founder Robert Granieri, along with employees Bryce Pratt and Michael Huang.
The Office of the Terraform Labs Plan Administrator has filed a lawsuit against Jane Street, alleging insider trading, market manipulation, and deceptive trading practices that contributed to the May 2022 collapse of Terraform Labs.
The complaint details how Jane Street…
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The heavily redacted filing claims the defendants misused confidential information gained from connections with Terraform insiders to trade ahead of the Terra ecosystem’s sudden collapse.
Alleged pre-collapse token sales
Terraform’s decline began in May 2022 when its algorithmic stablecoin TerraUSD lost its dollar peg. This triggered a chain reaction that wiped out about $40 billion in market value. The company later filed for bankruptcy in 2024. Its co-founder, Do Kwon, was arrested and pleaded guilty in the United States to two fraud charges before receiving a 15-year prison sentence in December.
At the centre of the lawsuit is a claim that Jane Street executed large token sales just hours before the Terra ecosystem fell apart.
Snyder claims that Jane Street received important non-public information that enabled it to unload “hundreds of millions of dollars” in exposure at a crucial moment. Although the trading firm began working with Terraform in 2018, its activity with Terra-linked tokens reportedly increased in 2022 after Pratt, a former Terraform intern, reconnected with previous colleagues.
The complaint alleges that these renewed connections created what Snyder calls a “back-channel” source of sensitive business information.
Claims of ongoing coordination
One main allegation involves May 7, 2022. According to the filing, Terraform withdrew 150 million TerraUSD tokens from a liquidity pool without a public announcement. Minutes later, Jane Street allegedly made its largest-ever swap of the token, selling 85 million TerraUSD into the same pool. The administrator argues this action accelerated a broader sell-off that ultimately pushed the system into a death spiral.
The lawsuit also claims that Jane Street continued to use privileged insights as the crisis worsened. Snyder asserts that internal communications, including a group chat allegedly set up between Pratt and Kwon, influenced trading decisions as TerraUSD’s peg weakened.
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