The administrator overseeing Terraform Labs’ liquidation has sued Jane Street, accusing the trading firm of engaging in insider trading that accelerated the collapse of Do Kwon’s Terra-Luna empire.
Terraform Labs’ liquidation administrator, Todd Snyder, filed a complaint on Monday against Jane Street, co-founder Robert Granieri, and employees Bryce Pratt and Michael Huang, according to the Wall Street Journal. Snyder alleges that Jane Street used non-public information it obtained from Terraform Labs insiders to front-run trading.
“Jane Street abused market relationships to rig the market in its favor during one of the most consequential events in crypto history,” Snyder said, according to the WSJ report. The administrator added that his team will “pursue all avenues” against those who exploited their positions for “substantial profits” at the expense of Terraform Labs creditors.
Meanwhile, Jane Street reportedly disputed Snyder’s claim by saying that Terra-Luna’s collapse was a result of a “multibillion-dollar fraud” perpetrated by Terraform’s management, adding that it will defend against the “opportunistic claims” vigorously.
The Block has reached out to Snyder and Jane Street for further comment.
Allegations
Terraform Labs, led by founder Do Kwon, collapsed in 2022 when its algorithmic stablecoin TerraUSD depegged, falling into a death spiral alongside its sister cryptocurrency Luna. This wiped out over $40 billion from the market, causing a brutal contagion that triggered a wave of bankruptcies across the crypto lending industry.
After unsuccessful attempts to revive the ecosystem, Terraform filed for bankruptcy in 2024. Following the bankruptcy, the company agreed to pay the Securities and Exchange Commission $4.47 billion in penalties. Last December, Kwon was sentenced to 15 years in U.S. prison following his guilty plea to two criminal counts back in August.
According to the WSJ report citing the complaint, Jane Street sent its employee and ex-Terraform Labs member Bryce Pratt to form communication lines with his former colleagues at the crypto firm, including its software engineer and the head of business development. Their chat group was used as a channel to bring Terraform-related information to Jane Street, Snyder claims.
Jane Street allegedly used those communication channels to obtain non-public information about Terraform and pursue insider trading for profit, the complaint alleges.
The complaint mentions one instance where Terraform Labs withdrew 150 million TerraUSD from the Curve3pool on May 7, 2022, without making an announcement. Within 10 minutes, a wallet allegedly linked to Jane Street withdrew an additional 85 million TerraUSD from the same pool. The lawsuit alleges the timing and details of these withdrawals were not disclosed to the public.
Jump Trading
Last December, Snyder sued Jump Trading and its top executives, claiming that Jump “actively exploited” the Terraform Labs ecosystem by entering into a backdoor deal to inflate the value of algorithmic stablecoin TerraUSD before it imploded. The administrator sought $4 billion in damages from the defendants.
Jump reportedly appears in the latest complaint against Jane Street, as Snyder claims that some of the non-public information was leaked to Jane Street through Jump Trading.
On May 9, amid the TerraUSD depeg, Pratt initiated a group message with Kwon and Jane Street representatives to express interest in bidding on Luna or bitcoin. Kwon replied that Jump co-founder Bill DiSomma should have already contacted them regarding a Terraform fundraise, the complaint alleges.
© 2026 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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