- Terraform Labs’ administrator has sued Jane Street, accusing it of insider trading that accelerated the collapse of LUNA and UST coins.
- He claims that Jane Street received non-public information from a former employee to front-run retail traders; Jane Street has dismissed the claims.
Terraform Labs, the crypto company behind the collapsed LUNA and UST tokens, has filed a new lawsuit against Jane Street, accusing the Wall Street giant of insider trading that sped up the collapse of its crypto ecosystem.
Filed in a Manhattan court, the lawsuit alleges that Jane Street used information that was not public to front-run the market and make millions at the expense of retail traders. The lawsuit comes two months since the project sued Jump Trading, another high-frequency trading giant, for contributing to and unlawfully profiting from its collapse.
The latest lawsuit claims that Terraform Labs’ relationship with Jane Street goes as far back as 2018, but that the trading firm started dealing in its LUNA and UST tokens in 2022. It allegedly used Bryce Patt, a former intern at the Labs to infiltrate the company, setting up messaging groups with Terraform officials to dig up information about the company.
One of the messaging groups was called ‘Bryce’s Secret’ and involved the head of business development and a senior software engineer at the Labs.
Patt later allegedly created an email chain introducing the leadership of Jane Street and Terraform, with the former expressing an interest in investing in the latter. However, as the lawsuit alleges, Jane Street used the communication to acquire non-public information which it used to guide its trading decisions on LUNA and UST.
Terraform: Jane Street Abused Market Relationships
The Terra ecosystem collapsed in May 2022 after its algorithmic stablecoin, UST, lost its peg and erased billions of dollars in a few days. Its sister token, LUNA, plunged shortly after. The two tokens wiped out over $40 billion in investor funds and sparked a broader fallout that brought down some of crypto’s largest firms at the time, including Three Arrows Capital and FTX.
Founder Do Kwon took the fall for the collapse and is currently serving 15 years behind bars for fraud, as we have reported.
Terraform Labs now wants other who might have triggered the collapse to face the law, starting with Jump Trading, which it took to court in December, and now Jane Street.
In a statement seen by the Wall Street Journal, administrator Todd Snyder stated:
Jane Street abused market relationships to rig the market in its favor during one of the most consequential events in crypto history. On behalf of injured parties, we will pursue all avenues supported by the facts and the law against those who exploited their position and reaped substantial profits at the expense of Terraform Labs’ creditors.
Jane Street has refuted the claims, terming the lawsuit as Terraform’s ‘desperate’ attempt to extract money from the company. It added that the company’s collapse and the subsequent losses to investors “were the result of a multibillion-dollar fraud perpetrated by the management of Terraform Labs.”
“We will defend ourselves vigorously against these baseless, opportunistic claims,” a spokesperson for the company added.
Disclaimer: The information on this page may come from third parties and does not represent the views or opinions of Gate. The content displayed on this page is for reference only and does not constitute any financial, investment, or legal advice. Gate does not guarantee the accuracy or completeness of the information and shall not be liable for any losses arising from the use of this information. Virtual asset investments carry high risks and are subject to significant price volatility. You may lose all of your invested principal. Please fully understand the relevant risks and make prudent decisions based on your own financial situation and risk tolerance. For details, please refer to
Disclaimer.
Related Articles
Korean crypto investment loss dispute escalates: Man involved in poisoning case shocks the market, $810,000 Bitcoin loss becomes the catalyst
February 25 News, a criminal case in South Korea related to losses from cryptocurrency investments has sparked widespread social discussion. A man in his 30s was indicted by prosecutors for allegedly adding insecticide to coffee to kill a spider after a fierce dispute with a business partner over more than $816,000 in crypto investment losses. The victim was poisoned and fell into a coma. He is currently facing charges of attempted murder and violations of the Agricultural Chemicals Control Act.
According to South Korean media reports, the incident occurred in November 2025 at a coffee shop. The victim suddenly lost consciousness and collapsed after drinking the beverage, and was rushed to the hospital. He regained consciousness three days later. The victim stated that this incident has caused serious impact on his family. Although his physical condition is gradually recovering, he still needs ongoing medical examinations.
GateNewsBot5m ago
IoTeX Security Incident Update: Asset Security, 99.5% of Anomalous Minting Frozen, Global Tracking Initiated
The IoTeX network has completed a version upgrade, resumed operation, and committed to fully compensate users affected by the ioTube incident. 99.5% of abnormal minting has been intercepted, and hacker funds have also been locked. The team is working with exchanges to restore trading and strengthen security measures to prevent similar incidents from happening again.
GateNewsBot7m ago
Jane Street Responds to Terra Bankruptcy Trustee: Allegations Are Groundless and Opportunistic
Jane Street responds to the lawsuit filed by Terraform Labs' bankruptcy administrator, stating that the allegations are baseless and aimed at extorting money. Jane Street firmly defends its rights, pointing out that the losses stem from fraudulent actions by Terraform Labs' management.
GateNewsBot10m ago
The truth behind the LUNA crash? Someone predicted the $40 billion evaporation 10 minutes in advance
Written by: Cosmic Wave Naruto, Deep Tide TechFlow
In May 2022, $40 billion evaporated within 72 hours.
It was the most devastating crash in the history of cryptocurrency. Once hailed as the "crown jewel of algorithmic stablecoins," UST plummeted from $1 to worthless paper within days; Luna, which had a market cap of nearly $40 billion, fell from a high of $116 to nearly zero.
Millions of ordinary investors lost their savings that early summer. They kept refreshing their screens, staring at the continuously falling candlestick chart, clueless about what was happening or what to do.
The official explanation came quickly: the algorithm was flawed, Do Kwon lied, and the market naturally died. Most people accepted this answer, attributing the catastrophe to "another lesson in the crypto world," and then moved on.
This explanation held for nearly four years.
PANews41m ago
Cryptocurrency ATM Regulation Upgrades: Bitcoin Depot Mandates Identity Verification for Each Transaction, US Anti-Fraud and KYC Compliance Tighten Across the Board
February 25 News, U.S. cryptocurrency ATM operator Bitcoin Depot announced that it will implement phased new regulations across its U.S. network starting in early February 2026, requiring users to provide identification for every cryptocurrency ATM transaction to strengthen anti-fraud monitoring and compliance review. This move is seen as an important upgrade in risk control and identity verification mechanisms in the crypto ATM industry amid tightening regulatory environments in the United States.
Bitcoin Depot CEO Scott Buchanan stated that continuous identity verification processes can identify suspicious behavior based on user identity, transaction location, and amount before transaction approval, thereby reducing risks of account sharing, identity theft, and scams. The company previously implemented identity verification requirements for new users in October 2025, and this policy has now been expanded to all transaction scenarios, meaning the standards for real-name verification at crypto ATMs are further tightening.
GateNewsBot1h ago
Putin personally signs new law! Authorizes Russian courts to confiscate Bitcoin and other cryptocurrencies "during investigations"
Russian President Putin has signed a new law defining cryptocurrencies as "intangible property," granting courts the authority to confiscate them during criminal investigations. Experts warn that Russia may block overseas cryptocurrency exchanges to keep the $15 billion in annual fees domestic, demonstrating a dual-track policy towards the crypto market: both legalization and strict regulation.
動區BlockTempo2h ago
