Terraform Labs Sues Jane Street Group for $4B Over Alleged UST Frontrunning

Terraform Labs, through bankruptcy administrator Todd Snyder, filed a $4 billion lawsuit against Jane Street Group on Monday in Manhattan federal court, alleging insider trading and frontrunning tied to the May 2022 collapse of TerraUSD (UST) and LUNA, The Wall Street Journal reports. The complaint claims Jane Street executed an $85 million UST sale minutes after a confidential liquidity withdrawal by Terraform Labs, worsening the UST peg while insulating the firm from losses; it names Jane Street cofounder Robert Granieri and employees Bryce Pratt and Michael Huang, alleging access to nonpublic internal decisions enabled the disputed trades. Previous investigations examined Telegram chats among Jump Trading, Jane Street, and Alameda Research regarding possible market manipulation before the collapse, and Terraform's administrator has also lodged a $4 billion claim against Jump Trading tied to the UST rescue plan. Terraform's collapse erased roughly $40 billion in market value, and the broader Terra community welcomed the Jane Street filing as part of ongoing efforts to recover value and address alleged misconduct.