Terraform Accuses Jane Street of Insider Trading Ahead of $40B UST-LUNA Collapse

Terraform Labs, the administrator of the now-defunct Terra ecosystem, has filed an amended complaint against Jane Street, a quantitative trading firm. The complaint alleges that Jane Street's traders created a secret Telegram chat with current and former Terraform employees to obtain non-public information about the company's internal liquidity decisions.

The alleged trades occurred on May 7, 2022, just hours before the stablecoin TerraUSD (UST) lost its dollar peg. According to the complaint, Jane Street's traders sold their entire $192 million UST position and later shorted UST and Luna, making over $134 million from the trades.

The lawsuit marks the second major case brought by Terraform's wind-down trust against a high-frequency trading firm tied to the ecosystem's implosion. The collapse of the Terra ecosystem in May 2022 sparked a broader crypto contagion that toppled several major firms and erased trillions in market value.