Todd Snyder, the liquidator for Terraform Labs, has filed a lawsuit against Jane Street, accusing the trading platform of insider trading. This was reported by The Wall Street Journal.
Snyder claims that the actions of the platform, its co-founder Robert Granieri, and employees Bryce Pratt and Michael Huang accelerated the collapse of Do Kwon's ecosystem. He alleges that these individuals used non-public information obtained from Terraform insiders to execute trades ahead of the market.
“Jane Street abused its market connections to manipulate the market in its favor during one of the most significant events in cryptocurrency history,” the documents state.
The plaintiff added that his team is utilizing all available mechanisms against those who exploited their position to gain "substantial profits" at the expense of Terraform Labs' creditors.
Jane Street has denied the allegations, stating that the ecosystem's collapse was a result of a "multi-billion dollar fraud" by its management.
Details
According to the complaint referenced by the WSJ, Jane Street sent employee Bryce Pratt to reconnect with former colleagues at Terraform. A chat created for communication was allegedly used as a channel for transmitting confidential information, Snyder claims.
The lawsuit cites a specific incident: on May 7, 2022, Terraform Labs secretly withdrew $150 million in TerraUSD from the Curve3pool. Within 10 minutes, a wallet allegedly linked to Jane Street moved an additional $85 million in TerraUSD from there. The platform representatives did not disclose the details or timing of these transactions.
The plaintiff contends that Jane Street used the insider information to conduct profitable trades.
Another Defendant
In December 2025, Snyder filed a lawsuit against Jump Trading and its top executives. The reason was a series of secret agreements between the market maker and Terraform, which involved artificially inflating the value of TerraUSD.
The total claims against the defendants amounted to $4 billion.
Jump is also mentioned in the new case against Jane Street. According to Snyder, some insider information may have reached the trading platform through Jump Trading.
As evidence, he cited an incident from May 9, 2022, when TerraUSD was already losing its peg. Pratt created a group chat involving Do Kwon and representatives from Jane Street to express interest in purchasing Luna or Bitcoin. Kwon responded that Terraform's co-founder Bill DiSomma should have already contacted them regarding capital raising.
Collapse and Sentencing
Terraform Labs, under Do Kwon's leadership, collapsed in 2022. At that time, its algorithmic stablecoin TerraUSD lost its peg to the dollar, dragging its associated cryptocurrency Luna into a "death spiral."
The disaster wiped out over $40 billion in cryptocurrency market capitalization and triggered a wave of bankruptcies in the lending sector.
After unsuccessful attempts to save the ecosystem, Terraform filed for bankruptcy in 2024 and agreed to pay a $4.47 billion fine to the SEC.
Notably, in December 2025, Kwon was sentenced to 15 years in prison in the U.S. Prior to this, he pleaded guilty to criminal charges of fraud and conspiracy.