Terraform liquidator sues Jane Street over insider trading

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, alleging the firm traded on nonpublic information from Terraform during the TerraUSD and Luna collapse in 2022.

According to the filing, Jane Street obtained confidential details from inside Terraform through channels set up by Pratt, a former Terraform employee who later joined Jane Street. Snyder contends Pratt reconnected with a Terraform software engineer and the head of business development and used a group chat to pass Terraform-related information to Jane Street.

One episode highlighted in the complaint centers on May 7, 2022. Terraform withdrew 150 million TerraUSD from the Curve3pool without a public notice. About 10 minutes later, a wallet allegedly linked to Jane Street withdrew an additional 85 million TerraUSD from the same pool. The complaint asserts the timing and details were not public and that the sequence reflected trading on nonpublic information.

The filing also cites May 9, 2022, during TerraUSD’s depeg. Pratt allegedly began a group message with Terraform founder Do Kwon and Jane Street representatives to discuss potential bids on Luna or bitcoin. The complaint states Kwon replied that Jump Trading co-founder Bill DiSomma should already have contacted them about a Terraform fundraise, and alleges some nonpublic information reached Jane Street through Jump.

“Jane Street abused market relationships to rig the market in its favor during one of the most consequential events in crypto history,” Snyder asserted, adding that his team will “pursue all avenues” against those who profited at the expense of Terraform Labs’ creditors. Jane Street disputed the claims, describing Terra-Luna’s failure as a “multibillion-dollar fraud” by Terraform’s management and pledging to fight what it called “opportunistic claims.”

Terraform Labs unraveled in May 2022 when its algorithmic stablecoin TerraUSD lost its dollar peg, triggering a rapid collapse alongside its sister token Luna that wiped out more than $40 billion in market value. After unsuccessful efforts to revive the project, Terraform filed for bankruptcy in 2024 and agreed to pay the Securities and Exchange Commission $4.47 billion in penalties. In December, Kwon received a 15-year U.S. prison sentence after pleading guilty to two criminal counts in August.

Snyder has also brought related claims against Jump Trading. In a separate lawsuit filed in December, he alleged Jump and top executives “actively exploited” the Terraform ecosystem through a backdoor arrangement to support TerraUSD before its collapse and sought $4 billion in damages. Jump is referenced in the Jane Street complaint in connection with the alleged flow of nonpublic information.