Terraform Estate Files Case Against Jane Street in New York

Terraform estate sues Jane Street over alleged insider trading during 2022 TerraUSD collapse, citing 150 million and 85 million UST withdrawals.

Terraform Labs’ bankruptcy estate has filed a major lawsuit in New York federal court. Moreover, the complaint accuses Jane Street of using nonpublic information at the time of the 2022 collapse. Consequently, the estate is trying to recover funds for affected creditors in the TerraUSD crisis.

Lawsuit Alleges Insider Trading During TerraUSD Collapse

According to The Wall Street Journal, the court-appointed administrator filed the complaint this week. Furthermore, according to the lawsuit, Jane Street front-ran trades with insider access. Therefore, the estate alleges that the firm made a profit while the markets collapsed.

The filing says that on May 7, 2022, Terraform withdrew 150 million TerraUSD from Curve. However, wallets that were allegedly linked to Jane Street withdrew 85 million UST shortly thereafter. Consequently, the estate uses this timing to suggest privileged knowledge.

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

Todd Snyder, the court-appointed plan administrator, refuted the allegations directly. He said Jane Street abused market relationships in a historic crypto collapse. Moreover, he called the episode one of crypto’s most consequential events.

Terraform Labs collapsed in 2022 when its algorithmic stablecoin lost its dollar peg. Subsequently the TerraUSD entered a death spiral along with its sister token of Luna. As a result, more than 40 billion dollars were wiped out from the crypto market.

Defendants Named as Estate Expands Legal Recovery Efforts

The lawsuit lists Jane Street Group LLC and its co-founder Robert Granieri. Further, employees Bryce Pratt and Michael Huang are named as the defendants. Therefore, the estate brought its legal action against more than just the corporate entity.

Jane Street denies the allegations, as reported by The Wall Street Journal. Furthermore, the firm described the lawsuit as a desperate attempt to get money. It asserted that Terraform management led to multibillion-dollar fraud losses.

This case comes after another lawsuit filed in December 2025 against Jump Trading. In that separate federal complaint the estate is asking for 4 billion dollars. Moreover, the administrator alleges some nonpublic information got to Jane Street via Jump Trading.

After the collapse, Terraform applied for bankruptcy protection in 2024. Subsequently, the company agreed to pay 4.47 billion dollars to the US Securities and Exchange Commission. Therefore, regulators handed out one of the biggest crypto fines in history.

Founder Do Kwon later pleaded guilty to 2 criminal counts in August 2025. In December 2025, he was given a sentence of 15 years in prison by a US court. As a result, legal accountability went beyond corporate punishment.

The administrator now alleges that Jane Street unwound by hundreds of millions of exposure hours before its collapse. Moreover, according to the estate, this privileged access did harm the ordinary investors. Therefore, the goal of the lawsuit is to maximize the recovery of creditors through litigation.

Overall, the legal dispute demonstrates ongoing repercussions from the TerraUSD collapse in 2022. Meanwhile, creditors wait for possible recoveries through the courts. Consequently, this case could have an impact on crypto trading oversight and the resolution of bankruptcy claims in the future.