TLDR Tech / Crypto
Jane Street Insider-Trading Allegations in Terra Collapse
Terraform Labs' amended lawsuit against Jane Street Group alleges the firm used a private Telegram channel called "Bryce's Secret" to receive insider information from former Terraform intern Bryce Pratt, enabling Jane Street to exit a $192 million UST position and profit approximately $134 million by shorting Terra's ecosystem before the May 2022 collapse. The complaint's most pointed allegation involves an $85 million UST sale on Curve Finance executed nine minutes after Terraform pulled $150 million in liquidity from the pool, with named defendants including co-founder Robert Granieri and trader Michael Huang. A 2023 federal ruling classifying UST and Luna as securities underpins the complaint's claims under both securities law and the Commodity Exchange Act, which also cover allegations that Jane Street attempted to conceal wallet identifications and extended a job offer to Terraform's research head on May 18, 2022, during the depeg. Jane Street called the suit "desperate" and "baseless," attributing its trading activity to Terraform's own management fraud, as litigation proceeds against the backdrop of the $40 billion ecosystem wipeout.
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