Federal Lawsuit Targets Jane Street Over Terra's $40 Billion Crypto Collapse

A federal lawsuit filed against Jane Street has shed light on the events surrounding Terra's $40 billion UST stablecoin collapse. According to the complaint, Jane Street used confidential details of Terraform's emergency measures to sell 85 million UST, triggering a market crash.

The lawsuit alleges that Jane Street obtained this information through employees Bryce Pratt, Michael Huang, and co-founder Robert Granieri, who had access to sensitive information about Terraform's plans. The complaint claims that this coordinated action, with prior knowledge of the liquidity removal, led to UST's depegging and LUNA's hyperinflation.

Jane Street has denied the allegations, stating that all trades were legitimate and talks with Terraform were exploratory and non-binding. However, the lawsuit has raised concerns about insider trading, fiduciary duties, and transparency in decentralized markets.