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- Jane Street faces allegations of insider trading tied to the Terra-LUNA collapse.
- Terraform Labs claims the firm used private Telegram channels for non-public information.
- LUNC and USTC prices moved higher following the lawsuit revelations.
Fresh allegations tied to the collapse of the Terra ecosystem are once again drawing attention to one of crypto’s biggest disasters. A newly unsealed court filing claims quantitative trading giant Jane Street used insider information from Terraform Labs employees to exit its UST holdings before the stablecoin’s catastrophic depeg in 2022.
The filing, submitted by Terraform Labs’ court-appointed bankruptcy administrator in the Southern District of New York, accuses Jane Street and several former insiders of insider trading, fraud, and market manipulation linked to the $40 billion Terra-LUNA collapse.
Court Filing Details Secret Telegram Group
According to the complaint, Jane Street allegedly gained access to confidential information through a private Telegram chat called “Bryce’s Secret.” The group reportedly involved former Terraform intern Bryce Pratt, who later joined Jane Street as a systems developer.
The lawsuit claims the trading firm received non-public information regarding Terraform’s liquidity position, investment plans, and trading strategies. Administrators argue this gave Jane Street a major advantage during the critical days leading up to UST’s collapse.
Court documents allege the firm sold approximately $192 million worth of UST before the stablecoin lost its peg to the US dollar. It also allegedly profited by taking short positions against Terra-related assets during the market panic.
Terraform Labs Seeks Damages
The complaint was filed by bankruptcy administrator Todd R. Snyder on behalf of Terraform Labs’ estates, the Luna Foundation Guard, and affected creditors. The lawsuit seeks damages, profit disgorgement, and other legal remedies.
The filing also accuses the defendants of attempting to conceal activity connected to a crypto wallet allegedly tied to the trades. According to the complaint, the wallet has remained inactive since May 2022.
The allegations have not yet been proven in court, and Jane Street has not publicly responded to the latest claims at the time of writing.
LUNC and USTC Prices React to the News
The legal developments triggered renewed market attention around Terra Luna Classic and TerraClassicUSD.
LUNC climbed more than 2% following the filing news, trading around $0.0000768. However, the token remains under pressure after losing roughly 37% in May despite posting a strong rally earlier this year.
Also Read: Terraform Labs Extends Crypto Claims Deadline to May 16 — Don’t Miss Your Last Chance
Meanwhile, USTC gained nearly 5% over the past 24 hours, with trading activity rising sharply as traders reacted to the court revelations.
The new lawsuit adds another controversial chapter to the Terra-LUNA collapse, a crisis that reshaped crypto regulation and investor sentiment worldwide. If the allegations are proven, the case could become one of the most significant insider trading disputes in crypto history and intensify scrutiny on relationships between major trading firms and blockchain projects.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
