Crypto & Forex February 24, 2026 0 Comments

Inside the High-Stakes Legal Battle: Did Jane Street’s Alleged Front-Running Trigger Terraform Labs’ Catastrophic Collapse?

When you think about the dizzying rise and catastrophic fall of TerraUSD and LUNA, one has to wonder—who really called the shots behind the scenes? Todd Snyder, Terraform Labs’ bankruptcy plan administrator, is now pulling back the curtain with a lawsuit against none other than Jane Street Group. The allegation? Front-running trades fueled by insider secrets that didn’t just fatten Jane Street’s pockets but arguably accelerated the $40 billion meltdown we all watched in shock back in May 2022. Imagine profiting off information so hush-hush it flipped the entire crypto landscape upside down—and left countless investors grappling with ruins. This isn’t just a tale of financial missteps; it’s a high-stakes intrigue involving key players like Jane Street’s co-founder Robert Granieri and others, intertwining with probes into Jump Trading and echoes from courtroom confessions. The big question floating now is: in the world of rapid crypto trades and volatile tokens, how thin is the line between savvy market moves and outright manipulation? Dive into the depths of this unfolding drama—it’s not just about lost billions, but the very essence of trust in digital finance. LEARN MORE

The bankruptcy plan administrator of Terraform Labs, Todd Snyder, has filed a lawsuit against Jane Street Group for alleged front-running trades that allowed the trading powerhouse to profit from non-public information obtained from Terraform insiders, The Wall Street Journal reported Monday.

The complaint, submitted in Manhattan federal court, claims these trades not only enriched Jane Street but also contributed to the rapid collapse of the TerraUSD (UST) stablecoin and LUNA in May 2022.

The lawsuit also names Jane Street co-founder Robert Granieri and employees Bryce Pratt and Michael Huang as defendants.

Terraform’s implosion in May 2022 wiped out roughly $40 billion in value when its dollar-pegged stablecoin TerraUSD lost its anchor, and sister token Luna plunged to nearly zero within days.

Snyder has separately pursued a $4 billion claim against Jump Trading, alleging the firm orchestrated market manipulation by initially propping up TerraUSD before withdrawing support, generating approximately $1 billion in gains.

Manhattan federal prosecutors previously reviewed Telegram chats between staff at Jump Trading, Jane Street, and Alameda Research related to a proposed TerraUSD rescue.

The probe focused on whether these communications could have constituted market manipulation in the lead-up to the stablecoin’s collapse, which left UST and Luna essentially worthless and triggered a wave of bankruptcies, including Three Arrows Capital, Voyager Digital, and FTX.

Terraform founder Do Kwon pleaded guilty to fraud charges tied to misleading statements about the stablecoin’s stability mechanisms and received a 15-year prison sentence.