Newly unsealed court filings in Manhattan federal court allege that Jane Street Group, a major Wall Street trading firm, used a private Telegram backchannel with Terraform Labs insiders to gain an informational edge before the collapse of the TerraUSD (UST) stablecoin in May 2022. The complaint, filed by the administrator winding down Terraform's bankruptcy estate, claims Jane Street dumped approximately $192 million in UST on May 7, 2022, just nine minutes after Terraform withdrew $150 million in UST liquidity from Curve Finance. The suit alleges that former Terraform intern Bryce Pratt, then working at Jane Street, joked about their "informational advantage" in internal messages. Jane Street's sale of UST near par before its collapse, along with subsequent short positions, allegedly generated about $134 million in profits. The lawsuit names Jane Street co-founder Robert Granieri and trader Michael Huang, citing violations of federal securities laws and the Commodity Exchange Act. Jane Street denies the allegations as "baseless" and "opportunistic," vowing to defend itself. The court filings also reveal that Jane Street offered Terraform's head of research a job on May 18, 2022, just after the collapse, which he accepted.

Key facts

• Jane Street allegedly used a private Telegram chat with Terraform insiders for information advantage before UST collapse.
• The firm dumped $192 million in UST on May 7, 2022, nine minutes after Terraform withdrew liquidity.
• Jane Street short positions after the dump allegedly generated $134 million in profits.
• Former intern Bryce Pratt joked about the 'informational advantage' in internal messages.
• Jane Street denies allegations as 'baseless' and 'opportunistic', vows to fight the suit.

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