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Terraform Labs administrator Todd Snyder has alleged in an amended complaint filed Monday that Jane Street traders used a private Telegram chat to obtain insider information from Terraform employees before dumping the firm's entire $192 million TerraUSD position hours before the stablecoin's collapse on May 7, 2022. The complaint claims the quantitative trading firm used a secret message chain named "Bryce's Secret" to receive confidential information from current and former Terraform staff. This alleged activity occurred during the $40 billion Terra implosion in May 2022, which triggered a broader crypto contagion that led to the bankruptcy of multiple major firms including Celsius, Three Arrows Capital, and Voyager.
Allegations Against Jane Street
Snyder, the court-appointed Terraform Labs plan administrator, accused Jane Street, co-founder Robert Granieri, and traders Bryce Pratt and Michael Huang of insider trading and shorting Terra tokens during the collapse.
The filing alleges Jane Street's traders created the "secret message chain" involving current and former Terraform employees. The chat was created on February 22, 2022, between Pratt—a former Terraform intern who later joined Jane Street as a systems developer—and two former Terraform colleagues, including Terraform's Head of Business Development.
According to the complaint, one participant told Pratt in the chat, "bro we all know who the buyer is. its where u work," before naming "Jane Streeeeeeeet." The document alleges Pratt continued tapping his Terraform contacts for "defi info" that Jane Street was "very hungry for," often sending requests via Telegram with the instruction "don't share pls."
The Alleged Trading Activity
On May 7, 2022, Jane Street unstaked and sold its entire 192 million UST position in a single day, all effectively at the dollar peg, just hours before the stablecoin began its collapse, according to the complaint.
The filing alleges Jane Street later shorted UST and Luna after learning details of a confidential rescue effort, ultimately making more than $134 million across the trades. It also alleges Jane Street later attempted to "minimize this kind of visibility going forward" by decommissioning wallets tied to the trades after a Blocktower contact told the firm a group skilled at onchain analytics had concluded Jane Street "made a 'killing'" on its activity.
Jane Street's Response
"This suit is a transparent attempt to extract money when it is well-established that the losses suffered by Terra and Luna holders were the result of a multi-billion dollar fraud perpetrated by the management of Terraform Labs," a Jane Street spokesperson told Decrypt. They added that "As demonstrated in the motion to dismiss filed in court last month, we will defend ourselves vigorously against these baseless, opportunistic claims."
Jane Street had moved to dismiss the original suit in April, arguing it was a meritless attempt by Terraform's bankruptcy estate to shift blame for the collapse.
Context on Insider Trading in Crypto
Nic Puckrin, macro analyst and co-founder of Coin Bureau, told Decrypt that insider trading remains especially difficult to police in crypto because "the lines between market-making, privileged information flows and informal communication channels have historically been more blurred."
However, Puckrin noted crypto has one major advantage over traditional finance: "transparent on-chain data." He stated that "that level of visibility can make it much easier for investigators to trace flows of funds, trading patterns, and wallet activity" in order to prove or disprove allegations.
Background: The Terra Collapse
Terraform collapsed in May 2022 after the TerraUSD algorithmic stablecoin lost its dollar peg, sending sister token LUNA from above $60 to fractions of a cent within days. The roughly $40 billion Terra implosion unleashed a crypto contagion that toppled major firms, including Celsius, Three Arrows Capital, Voyager, and eventually FTX, while erasing trillions in market value.
Terraform sought Chapter 11 protection in Delaware in January 2024, and a wind-down trust was later established to pursue recoveries on behalf of creditors. Co-founder Do Kwon, extradited from Montenegro to face U.S. charges, pleaded guilty to conspiracy and wire fraud in December and is now serving a 15-year prison sentence.
The amended complaint expands on a lawsuit Snyder first filed in February, marking the second major case brought by Terraform's wind-down trust against a high-frequency trading firm tied to the ecosystem's implosion.
