LUNC News: Terraform Labs bankruptcy administrator has filed a lawsuit against quant trading firm Jane Street, alleging insider trading and front-running that contributed to the 2022 Terra-LUNA crisis.
The case expands the list of entities including Jump Trading sued for the TerraUSD (UST) algorithmic stablecoin depeg that erased $40 billion in market value and contributed to broader crypto turmoil, including the FTX collapse.
Terraform Labs Administrator Files Lawsuit Against Jane Street
In major LUNC news today, the Office of the Terraform Labs Plan Administrator has filed a lawsuit against Jane Street, alleging insider trading, market manipulation, and deceptive trading practices that contributed to the May 2022 collapse of Terraform Labs.
Todd Snyder, Terraform Labs’ liquidation administrator, also accuses Jane Street co-founder Robert Granieri, and employees including Bryce Pratt and Michael Hwang, according to the WSJ report.
The case details how Jane Street allegedly traded on non-public information, executed a concentrated $85 million UST sale minutes after a confidential liquidity withdrawal, and avoided substantial losses while investors suffered billions in damages.
The suit alleges that Jane Street obtained insider information about Terraform Labs’ internal liquidity decisions, including withdrawals from pools. The firm positioned trades to front-run these moves, profiting while worsening the peg for TerraUSD (now USTC) algorithmic stablecoin.
“Jane Street abused market relationships to rig the market in its favor during one of the most consequential events in crypto history,” Snyder said.
Terra Money claims the lawsuit seeks to recover damages for creditors and hold Jane Street accountable for exploiting the ecosystem and intensifying the Terra-LUNA crisis.
Terra Community Reactions on the News and LUNC Price
The broader Terra community hailed the decision by Terraform Labs bankruptcy administrator to file a lawsuit against Jane Street. In May 2022, TerraUSD (UST) depeg and (now LUNC) crash caused many people to lose their life savings and even commit suicide.
Some in the LUNC community said “things are about to get interesting” and “good news” as the crisis wiped out billions for investors and caused Terraform Labs to ultimately file for bankruptcy in 2024.
The development follows the administrator’s lawsuit against Jump Trading for $4 billion over alleged manipulation and insider deals tied to the collapse. The Jane Street case could further test insider liability rules in the decentralized market, with the CLARITY Act still under discussion.
At the time of writing, LUNC price is trading almost 0.50% higher at $$0.0000345. The 24-hour low and high are $0.0000342 and $0.0000351, respectively. Meanwhile, USTC is up more than 1% at $0.00474, wavering amid selling pressure in the broader crypto market.
Source: https://coingape.com/lunc-news-terraform-labs-administrator-sues-jane-street-for-terra-luna-crisis/
