Terraform Labs Bankruptcy Administrator Alleges Insider Trading in Suit Against Jane Street

The bankruptcy administrator for the defunct cryptocurrency company Terraform Labs has initiated legal action against Jane Street, a prominent market maker, citing allegations of insider trading linked to the catastrophic collapse of the Terra ecosystem in 2022. The lawsuit, which targets both the firm and specific individuals including co-founder Robert Granieri and traders Bryce Pratt and Michael Huang, accuses Jane Street of capitalizing on non-public information to preemptively execute trades, thereby exacerbating the Terra stablecoin downfall. The court-appointed administrator, Todd Snyder, contends the firm leveraged information from Terraform to make substantial profits at the expense of the market. Jane Street has rejected the accusations, labeling the lawsuit as baseless and pledging to contest it vigorously. This legal dispute emerges in the aftermath of Terraform's bankruptcy declaration in 2024 and co-founder Do Kwon's conviction on fraud charges. The scandal surrounding Terra, which resulted in the evaporation of approximately $40 billion from the crypto market, has continued to generate repercussions, prompting increased scrutiny and regulatory interest in the sector.