The “Terra-Luna Collapse,” which triggered a major earthquake in the crypto world in 2022 and caused $40 billion to evaporate, has new developments. Terraform Labs’ bankruptcy liquidator has officially filed a lawsuit in court, accusing Wall Street quant trading giant Jane Street of insider trading, which accelerated the fall of the Terra empire.
According to The Wall Street Journal, Terraform’s liquidation manager Todd Snyder submitted a complaint to the court on Monday, naming Jane Street, co-founder Robert Granieri, along with employees Bryce Pratt and Michael Huang as defendants.
The complaint states that Jane Street deliberately assigned Bryce Pratt, a former Terraform Labs employee, to leverage personal relationships with former colleagues, including the company’s software engineers and business development managers. Todd Snyder alleges that this “private chat group” composed of former colleagues became a secret channel to transmit major internal information from Terraform Labs to Jane Street, allowing this Wall Street giant to foresee market movements and conduct insider trading for profit before the market collapse.
The complaint mentions that on May 7, 2022, Terraform Labs quietly withdrew 150 million TerraUSD (UST) algorithmic stablecoins from Curve3pool without any public announcement. Ten minutes later, a wallet allegedly related to Jane Street also withdrew 85 million UST from the same liquidity pool.
Todd Snyder emphasizes that the timing and amount of Terraform Labs’ withdrawals were not disclosed to the public, providing undeniable evidence that Jane Street exploited insider information to “front-run” the market.
In fact, Todd Snyder’s liquidation team had already launched a full-scale attack, filing a $4 billion claim against Jump Trading and its executives late last year, accusing the firm of artificially inflating UST’s value through “backdoor agreements.” The latest complaint further reveals that some non-public confidential information about Terraform Labs was leaked to Jane Street through Jump Trading.
In the complaint, Todd Snyder criticizes: “Jane Street abused market relationships during one of the most influential events in cryptocurrency history to manipulate the market, tilting the scales in their favor.”
He also declared that the liquidation team will exhaust all means to hold accountable those who harm Terraform Labs’ creditors and profit from their positions.
Jane Street strongly denies the allegations, countering that the Luna-Terra collapse was purely due to Terraform Labs management’s involvement in a “massive multi-billion dollar fraud,” and states it will vigorously fight these “speculative accusations.”
In 2022, Terraform Labs faced a “death spiral” after UST de-pegged, with the ecosystem token LUNA plummeting over 99%. This catastrophe instantly wiped out over $40 billion in market value in the crypto space, triggering a domino effect that led to the bankruptcy of multiple crypto lending platforms.
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