Terraform Estate Files Major Case Against Jane Street in New York!

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In a dramatic legal twist, Terraform’s estate sues Jane Street for allegedly playing dirty during the 2022 TerraUSD fiasco, eyeing $150 million and $85 million UST withdrawals.

Ah, the sweet scent of courtroom drama! Terraform Labs’ bankrupt estate, fresh off a colossal collapse, has decided to go full throttle, filing a lawsuit in New York federal court. The target? Jane Street, accused of using some secret insider info to make a tidy profit during the chaotic TerraUSD collapse of 2022. Apparently, the estate is hoping to claw back a fortune for the poor souls who got burned in the crisis. How noble!

Lawsuit Alleges Insider Trading During TerraUSD Collapse

According to The Wall Street Journal, this week, the court-appointed administrator filed the complaint, claiming that Jane Street played dirty by front-running trades with their little insider advantage. You know, just a typical day in crypto-land, where billions can evaporate in the blink of an eye. The estate says that Jane Street was pocketing profits while the markets were doing their best impersonation of a burning dumpster.

According to The Wall Street Journal, the court-appointed administrator of Terraform Labs has sued Jane Street in New York federal court, alleging the firm used nonpublic insider information to front-run trades and profit during Terraform’s collapse. The filing says that on May…

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The filing dives into the details, like a detective in a bad noir film. On May 7, 2022, Terraform allegedly withdrew a cool $150 million from Curve. But wait, mere minutes later-almost suspiciously fast-wallets tied to Jane Street pulled out $85 million in TerraUSD (UST). Funny how those things work out when you have the right ‘inside’ info, right?

Related Reading: Do Kwon Gets 15-Year Sentence for Terraform Collapse | Live Bitcoin News

Todd Snyder, the court-appointed administrator, didn’t mince words. He straight-up called out Jane Street for abusing their market relationships in what he called one of the most “historic” collapses in crypto history. And let’s be real-crypto’s history is filled with more drama than a reality TV show.

The TerraUSD project itself? Oh, it collapsed in 2022 when its algorithmic stablecoin lost its precious dollar peg, spiraling along with its sibling token, Luna. In the aftermath, over $40 billion vanished into the ether. But don’t worry, crypto is totally stable, right?

Defendants Named as Estate Expands Legal Recovery Efforts

The lawsuit isn’t just pointing fingers at Jane Street; it’s throwing them all over the place. The legal action names Jane Street Group LLC and its co-founder Robert Granieri, as well as employees Bryce Pratt and Michael Huang. Nothing like a full-on corporate blame game!

Of course, Jane Street isn’t having any of it. The company denies the allegations, painting the whole lawsuit as a desperate money grab. “We’re innocent,” they say, adding that Terraform’s own management was responsible for the multi-billion-dollar mess that led to the collapse. That’s a real “not me, not me!” moment.

Oh, and just to keep the lawyers busy, this lawsuit comes right on the heels of another filed in December 2025 against Jump Trading, where the estate is asking for a cool $4 billion. Apparently, some juicy inside info made its way to Jane Street through Jump. The plot thickens!

After the collapse, Terraform sought bankruptcy protection in 2024, agreeing to fork over $4.47 billion to the US Securities and Exchange Commission, which was one of the largest crypto fines in history. Meanwhile, Do Kwon-yes, the founder-pleaded guilty to two criminal counts in August 2025, and in December, he got a nice 15-year vacation behind bars. Corporate punishment? Nah, this is personal.

Now, the estate’s saying Jane Street played the market like a fiddle, unwinding hundreds of millions in exposure right before the big fall. The lawsuit claims this “privileged access” did some serious damage to the ordinary investors. After all, who needs regular people when you’ve got insider info, right?

The estate’s main goal? Maximize the recovery of creditors through this grand legal battle. And it’s not just about the money; this case could set a precedent for crypto trading oversight and how bankruptcy claims are handled in the future. Who knew that such an epic collapse could lead to a battle royale in the courts?

So, buckle up! The Terraform saga continues, with more twists and turns than a Game of Thrones episode. Who will win? And who will be left holding the (digital) bag?

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2026-02-24 14:17