🚨 Jane Street Sued Over $40B Terra Crypto Collapse — Alleged Insider Trading
• In February 2026, the bankruptcy administrator for Terraform Labs filed an 83-page civil lawsuit in Manhattan federal court accusing quantitative trading firm Jane Street (and several employees) of insider trading and market manipulation tied to the infamous 2022 Terra / UST / LUNA crash that wiped out about $40 billion in crypto market value. �
COIN360 +1
• The complaint alleges Jane Street accessed non-public, material information from Terraform insiders (including through a private back-channel group chat involving a former Terraform intern who had joined Jane Street) and executed large UST trades minutes before Terra’s liquidity withdrawals were made public, profiting while pushed others into losses. �
Cointelegraph
• Key claim: a Jane Street-linked wallet sold ~85 million UST within about 10 minutes of Terraform’s own Curve pool withdrawal that wasn’t yet public — a trade the lawsuit says helped accelerate the stablecoin’s depeg and cascade collapse. �
MEXC
• Terraform’s estate is seeking damages, disgorgement of alleged profits, interest, and a jury trial on claims including insider trading and market manipulation. �
CoinCentral
• Jane Street denies wrongdoing, calling the suit “desperate,” “baseless,” and an attempt to shift blame from Terraform’s own management and fraud. �
AInvest
📌 Why this matters:
• The Terra crash remains one of the most destructive events in crypto history, sparking wider sector selloffs and bankruptcies. �
• If proven, these claims would mark a rare institutional insider trading case tied directly to a major crypto meltdown — potentially reshaping legal accountability in digital markets.
• Regardless of outcome, the lawsuit brings Jane Street — a major Wall Street quant trading firm — back into the spotlight on crypto risk and market fairness.