The liquidator for Terraform Labs, Todd Snyder, has initiated legal action against Jane Street, alleging insider trading that contributed to the collapse of the cryptocurrency ecosystem founded by Do Kwon. The lawsuit, reported by The Wall Street Journal, claims that Jane Street's co-founder Robert Granieri and employees Bryce Pratt and Michael Huang utilized confidential information from Terraform insiders to execute trades that undermined 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,” according to the legal documents.
Snyder's suit aims to hold accountable those who allegedly profited significantly at the expense of Terraform Labs' creditors. In response, Jane Street has rejected the accusations, attributing the ecosystem's downfall to a "multi-billion dollar fraud" orchestrated by Terraform's management.
Insider Trading Claims
The lawsuit details that Jane Street's employee, Bryce Pratt, was sent to reconnect with Terraform staff, allegedly using a group chat to exchange sensitive information. One notable incident cited occurred on May 7, 2022, when Terraform Labs withdrew $150 million in TerraUSD from the Curve3pool. Within ten minutes, a wallet linked to Jane Street transferred an additional $85 million in TerraUSD, raising suspicions of insider trading.
