According to Coindesk, Terraform Labs’ bankruptcy trustee, Todd Snyder, has filed a lawsuit against the high-frequency trading firm Jane Street, alleging that it used insider information to front-run trades, accelerating the collapse of TerraUSD and LUNA in 2022. The lawsuit claims that just 10 minutes after Terraform secretly withdrew 150 million TerraUSD from Curve3pool, a wallet associated with Jane Street withdrew 85 million TerraUSD from the same pool—a move that triggered the stablecoin’s depegging and ultimately led to $40 billion in market value evaporating. Jane Street has denied the allegations, calling them “baseless.” Terraform Labs filed for bankruptcy in January 2024; its founder, Do Kwon, has been sentenced to 15 years in prison after pleading guilty.
Jane Street Denies Allegations of Exploiting Insider Information in the Terra Collapse
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Summary
Terraform Labs’ bankruptcy trustee, Todd Snyder, has sued Jane Street, alleging the firm used insider information to front-run trades during the 2022 Terra collapse. The lawsuit claims Jane Street withdrew $85 million in TerraUSD from Curve3pool just 10 minutes after Terraform did, exacerbating the stablecoin’s de-pegging. Jane Street has dismissed the allegations as baseless. As altcoins come under pressure, the Fear & Greed Index remains near panic levels as crypto markets absorb the legal fallout.
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