Terraform Suit Alleges Jane Street Insider Trading Before Terra Collapse
Terraform Labs' administrator Todd Snyder filed an amended complaint on Monday accusing quantitative trading firm Jane Street and its employees of insider trading and shorting Terra tokens before the $40 billion collapse in May 2022. The complaint alleges that Jane Street traders used a secret Telegram chat named "Bryce's Secret" to obtain inside information from current and former Terraform employees. On May 7, 2022, Jane Street reportedly unstaked and sold its entire $192 million TerraUSD (UST) position hours before the stablecoin lost its peg, later shorting UST and Luna after learning details of a confidential rescue effort, netting over $134 million in profits. The filing also claims Jane Street attempted to hide its trades by decommissioning wallets after a third party identified its activities. Jane Street has dismissed the suit as a baseless attempt to shift blame for losses caused by Terraform's fraud, stating it will defend vigorously. The case highlights ongoing challenges in policing crypto insider trading, though on-chain transparency provides investigators with tools to trace fund flows.
Key facts
- Jane Street allegedly used a secret Telegram chat to obtain inside info from Terraform employees.
- Jane Street sold $192M UST hours before peg loss, later shorted tokens, profiting over $134M.
- The suit claims Jane Street decommissioned wallets after a third party identified its trades.
- Jane Street calls the lawsuit a baseless attempt to shift blame for Terraform's fraud.
- On-chain data transparency aids investigation of insider trading in crypto markets.