A new federal lawsuit accuses Jane Street of insider trading and market manipulation linked to the 2022 collapse of Terraform Labs’ TerraUSD (UST) and LUNA ecosystem. Todd R. Snyder, the plan administrator for the Terraform Labs Wind-Down Trust, filed the complaint in Manhattan federal court and asked for a jury trial.
Snyder’s complaint claims Jane Street leveraged “material non-public information” from Terraform insiders, sold UST at an “opportune moment” on May 7, 2022, and avoided major losses as UST depegged within hours. The complaint also asks the court to order disgorgement “for the benefit of those who lost their investments” in the collapse.
Jane Street has not admitted wrongdoing in this matter. Public reporting on the lawsuit says the firm disputes the allegations and frames the case as an attempt to shift blame and extract money from a deep-pocketed defendant.
In the background, regulators and courts have already established major fraud findings against Terraform and its founder, Do Kwon, in separate proceedings. The SEC announced a multibillion-dollar resolution after a jury verdict, and Reuters has reported on the bankruptcy wind-down structure that created the trust Snyder now runs.
What the Lawsuit Actually Says
Snyder sues Jane Street Group, Jane Street Capital, and several individuals tied to the firm. The complaint describes Snyder as the plan administrator for the Terraform Labs Wind-Down Trust and says the U.S. Bankruptcy Court for the District of Delaware confirmed Terraform’s plan on September 20, 2024, with an effective date of October 1, 2024.
The complaint says Snyder’s role includes reconciling claims, making distributions, maximizing value for the trust, and pursuing litigation to recover assets for creditors and other claimants.
The complaint also lays out the legal framework Snyder uses. It cites federal securities-law claims under Exchange Act Section 10(b), Rule 10b-5, and Section 20A (an insider trading provision), along with commodities-law claims under the Commodity Exchange Act and CFTC Rule 180.1.
Why This Case Draws Attention
Most headline crypto lawsuits target token issuers, exchanges, or founders. Snyder instead targets a major market-making firm and argues that trading conduct accelerated the crash and generated profits at the expense of others.
Bloomberg’s summary of the lawsuit highlights two themes Snyder emphasizes: alleged use of “non-public information” and the claim that Jane Street unwound “hundreds of millions of dollars” of exposure shortly before the ecosystem collapsed.
That framing matters because it tries to translate a familiar Wall Street concept—insider trading—into a DeFi-heavy market structure where liquidity pools, on-chain activity, and private off-chain communication can interact in messy ways.
TerraUSD and LUNA, Briefly Explained
Terraform created TerraUSD as a stablecoin that aimed to maintain a $1 price. In May 2022, UST failed to hold its peg and LUNA collapsed alongside it, triggering a wider shock across crypto markets.
Reuters has described investor losses from TerraUSD and LUNA at roughly $40 billion and linked the collapse to a broader wave of crypto bankruptcies that followed.
The SEC has also described the May 2022 depeg as a near-total wipeout of UST’s value and “tens of billions of dollars” in market value in a short period, in the context of its fraud case against Terraform and Do Kwon.
The Core Allegations Against Jane Street
Snyder’s complaint builds its story around three connected ideas: access to confidential information, timing around May 7, 2022, and trading activity in key stablecoin liquidity venues.
Allegation 1: A Confidential Information Channel Through Telegram
The complaint alleges that, by at least May 7, 2022, Bryce Pratt (named in the suit) had established “a regular chain of communication” with Terraform’s Head of Research using Telegram.
The complaint also alleges an explicit confidentiality understanding. It says Pratt sent information with the request “don’t share pls,” and it describes the channel as a “two-way street” in which Terraform’s Head of Research also requested information about what “JS” was discussing.
Snyder uses this alleged relationship to support a classic insider-trading narrative: a trader obtains information from someone inside an organization, understands that confidentiality applies, and then trades based on it.
Allegation 2: The May 7 Timing and “Selling Before the Depeg”
Snyder claims Jane Street sold UST on May 7, 2022 “to maximize its own profits and avoid substantial losses,” and he alleges UST depegged within hours.
The complaint pairs that claim with contemporaneous trading assertions about Terraform itself. It says Terraform purchased over 250 million UST on May 7, over 200 million UST on May 8, and over 1.9 billion UST between May 8 and May 10, along with substantial LUNA purchases between May 8 and May 11.
Those details matter because Section 20A insider trading claims often focus on contemporaneous trading by harmed parties. Snyder appears to position Terraform (and other assigned claimants) as parties that traded in the same window as the allegedly informed seller.
Allegation 3: Curve Pools, Liquidity Shifts, and a Large UST Swap
Snyder’s complaint places heavy emphasis on Curve stablecoin liquidity pools. It describes Curve3 (the “3pool”) as the largest stablecoin pool at the time and describes plans for a “4pool” that would include UST alongside other stablecoins.
The complaint also asserts that the “exact timing” of activities associated with launching Curve 4pool, including “any withdrawals from the Curve 3pool,” did not qualify as public knowledge, even though Terraform had publicly announced creation and an anticipated launch.
Snyder then points to a specific market event: “That 85 million trade,” which the complaint calls the largest single swap on the Curve 3pool. Snyder alleges that the swap “precipitated a steep sell off” in UST that “ultimately led to the collapse of the Terra ecosystem.”
That allegation tries to connect information advantage (knowing when liquidity would move) with market impact (a large swap in a key pool) and then with outcome (accelerating the loss of confidence and the depeg).
The complaint’s next section continues the timeline by describing a sharp deterioration in UST’s market conditions: it says trading volume nearly doubled over May 8–9, and it says UST traded below $0.80 by May 9.
What the Lawsuit Seeks
Snyder asks for broad remedies that typically show up in market-manipulation and insider-trading complaints. He says the plan administrator role requires him to pursue claims against parties who profited from and contributed to the collapse, and he asks the court to order disgorgement of “wrongful gains” to benefit those who lost money in the collapse.
He also anchors the case in both securities and commodities law. That approach increases the odds that at least some claims survive early motions even if the court narrows how it classifies the relevant instruments.
How This Fits With Prior Terraform Findings
Snyder’s case does not replace or retry the government cases against Terraform. It builds on a backdrop in which regulators have already accused Terraform of major fraud.
Reuters reported that a bankruptcy judge approved Terraform’s wind-down plan after Terraform agreed to a settlement with the SEC, following a Manhattan jury verdict that found Terraform liable for defrauding investors.
The SEC’s press release on that case says Terraform agreed to pay more than $4.5 billion following the fraud verdict, wind down operations, and distribute remaining assets through a liquidation plan in bankruptcy.
Snyder’s complaint uses the wind-down trust structure created in that bankruptcy process and positions the lawsuit as one method to maximize distributions.
Jane Street’s Position So Far
At this stage, the public record mainly shows Snyder’s allegations, not final findings. Bloomberg’s coverage reflects Jane Street’s dispute of the allegations in the context of a “redacted complaint” and summarizes Snyder’s claims about non-public information and exposure reduction.
Courts typically treat complaints as allegations, not proof. The litigation process will determine which claims survive and what evidence supports or undermines Snyder’s theory.
What Evidence Will Likely Matter Most
This case will likely turn on four proof problems that show up in many crypto-trading disputes.
Wallet attribution and trade reconstruction
On-chain activity can show swaps and transfers, but plaintiffs still need to connect a wallet to a specific party in a way a court will accept. Snyder can pursue that through discovery (exchange records, counterparties, internal logs), but defendants often fight hard over scope and confidentiality.
Whether the information was truly non-public and material
Snyder’s complaint tries to draw a line between information the market could observe (general pool conditions) and information only insiders knew ahead of time (the exact timing of key liquidity moves). The complaint explicitly says the timing of Curve-related activities and withdrawals did not qualify as public knowledge.
Whether a duty or confidentiality obligation existed
Insider trading claims often hinge on duty and breach. Snyder’s complaint leans into the alleged Telegram confidentiality language (“don’t share pls”) to show that participants understood confidentiality and still shared sensitive information.
Causation and damages
Even if Snyder proves informed trading, he still must show that the alleged conduct caused measurable harm. The complaint calls the 85 million Curve 3pool swap a precipitating event that led to the collapse.
Defendants will likely argue that Terraform’s structural vulnerabilities and prior misstatements drove the outcome, a theme that already appears in government descriptions of Terraform’s conduct.
What Happens Next in Court
Complex financial cases often start with a motion to dismiss. Jane Street can argue that Snyder has not pleaded key elements with enough specificity, especially for fraud-based claims that require detailed allegations.
If the judge allows major claims to proceed, discovery will likely dominate the case. Discovery could include Telegram records, internal Jane Street communications, trade records, and expert analysis on liquidity mechanics in Curve pools and market impact around May 7–9, 2022. The case could also narrow if the court rejects certain legal theories, especially if classification disputes affect which statutes apply.
Bottom Line
The lawsuit against Jane Street alleges insider trading and market manipulation tied to TerraUSD’s May 2022 collapse. Snyder claims Jane Street used confidential information, sold UST at a key moment on May 7, and benefited as UST depegged and the broader Terraform ecosystem unraveled.
The complaint centers on alleged Telegram communications, non-public timing around liquidity activity, and an 85 million UST swap that Snyder calls the largest single swap on Curve’s 3pool.
A court has not ruled on the merits. The next phase will likely determine whether Snyder can substantiate wallet attribution, confidentiality, and causation strongly enough to move beyond allegations and into provable facts.
