Federal Lawsuit Targets Jane Street Over Alleged Role in Terra's $40 Billion Collapse

A federal lawsuit has been filed against quantitative trading firm Jane Street, alleging that it used insider knowledge to accelerate Terra's UST stablecoin collapse in May 2022. The collapse resulted in a $40 billion market crash.

The lawsuit claims that Jane Street obtained confidential details of Terraform's emergency measures and used this information to trigger UST's depegging and LUNA's hyperinflation. It is alleged that the firm's employees, Bryce Pratt, Michael Huang, and co-founder Robert Granieri, provided Jane Street with sensitive information.

Jane Street has denied the allegations, stating that all trades were legitimate and talks with Terraform Labs were exploratory and non-binding. The lawsuit comes after similar cases in 2025 and revives debates from the 2022 'crypto winter', which saw collapses including Three Arrows Capital and FTX.