Todd Snyder, the court-appointed administrator for the Terraform Labs bankruptcy estate, has filed an 83-page lawsuit against Jane Street Group in Manhattan federal court.
The complaint alleges that the high-frequency trading firm used material non-public information to engage in insider trading and front-running that accelerated the $40 billion collapse of the Terra ecosystem in May 2022.
The case, Snyder v. Jane Street Group LLC (26-cv-1504), is currently pending in the U.S. District Court for the Southern District of New York.
The Curve Pool Allegation
At the center of the lawsuit is what the complaint describes as the “Curve Pool” trade.
On May 7, 2022, Terraform Labs quietly withdrew $150 million in TerraUSD (UST) liquidity from the Curve 3pool without public notice. According to the filing, a wallet allegedly linked to Jane Street sold approximately $85 million in UST into the same pool just 10 minutes later.
The administrator claims this was the firm’s largest-ever single swap and that it triggered or intensified the de-pegging spiral that ultimately destabilized UST and the broader Terra ecosystem.
Alleged Insider Access
The lawsuit further alleges that Jane Street maintained access to sensitive, non-public information through Bryce Pratt, a Jane Street employee and former Terraform intern.
According to the complaint, Pratt allegedly established private communication channels with Terraform insiders, creating what the administrator characterizes as a “back-channel” for market-moving information.
The estate argues that this access enabled Jane Street to position itself ahead of liquidity shifts and unwind exposure before broader market participants could react.
Claims of Market Manipulation
The filing accuses Jane Street of abusing its market relationships to “rig the market” in order to reduce hundreds of millions in potential exposure during the collapse. The administrator contends that these actions occurred at the expense of other creditors and ecosystem participants.
In addition to the firm itself, the lawsuit names co-founder Robert Granieri and employees Michael Huang and Bryce Pratt as defendants.
Jane Street’s Response
A spokesperson for Jane Street described the lawsuit as “desperate” and “baseless,” arguing that the Terra collapse resulted from “massive fraud” by Terraform’s own management rather than external trading activity.
The legal action follows a separate $4 billion lawsuit filed in late 2025 by the same administrator against Jump Trading, signaling a broader effort to recover assets for creditors.
Legal and Industry Implications
If successful, the lawsuit could have significant implications for how courts evaluate insider trading and market manipulation claims within decentralized finance ecosystems. The case may also test how traditional securities and fraud doctrines apply to liquidity events on decentralized protocols.
For now, the matter remains in early litigation stages, with no findings of wrongdoing established. The outcome could shape future legal standards for institutional participation in crypto markets.
