Terraform alleges Jane Street dumped $192M UST via secret chat

Todd Snyder, the court-appointed plan administrator for Terraform’s wind-down trust, filed an amended complaint Monday alleging Jane Street and specific traders used private communications with Terraform employees to time trades around the May 2022 collapse.

The complaint names Jane Street, co-founder Robert Granieri and traders Bryce Pratt and Michael Huang. It alleges the traders created a private Telegram chain called “Bryce’s Secret,” opened on February 22, 2022, that included Pratt and two former Terraform colleagues, one identified as Terraform’s head of business development. The filing alleges participants referenced Jane Street as a buyer and that Pratt repeatedly sought decentralized finance information from his contacts.

According to the complaint, on May 7, 2022, Jane Street unstaked and sold its entire 192 million UST holding in a single day, effectively at the dollar peg, hours before UST began to lose its peg. The filing further alleges the firm then placed short positions on UST and LUNA after obtaining confidential details of a planned rescue, ultimately realizing more than $134 million in profits on the trades.

The amended complaint says Jane Street later decommissioned wallets tied to the transactions and that a contact at another trading firm reported on-chain analysts concluded Jane Street profited significantly from the trades. Snyder first sued Jane Street in February; the amended filing adds details about private messages and the timing of trades.

Jane Street rejected the allegations in a written statement, calling the lawsuit “a transparent attempt to extract money” and arguing the losses suffered by Terra and LUNA holders resulted from fraud by Terraform management. The firm noted it filed a motion to dismiss the original complaint and intends to defend the case.

Nic Puckrin, a macro analyst and co-founder of Coin Bureau, commented that proving insider trading in crypto can be difficult because market making, informal information flows and private chats often overlap. He added that public blockchain records can allow investigators to trace fund flows, trading patterns and wallet activity.

The complaint ties to the broader collapse in May 2022, when TerraUSD lost its dollar peg and LUNA plunged from above $60 to near zero, a roughly $40 billion implosion that triggered a market contagion and contributed to multiple firm failures. Terraform sought Chapter 11 protection in January 2024 and established a wind-down trust to pursue recoveries for creditors. Previously, Terraform’s liquidator sued Jane Street over insider trading. Co-founder Do Kwon was extradited to the U.S., pleaded guilty to conspiracy and wire fraud in December, and is serving a 15-year prison sentence.