Key Highlights
- Terraform Labs’ administrator has filed three lawsuits against Jane Street over its alleged role in the 2022 Terra and LUNA collapse.
- The lawsuits claim Jane Street used private information from Terraform insiders to make trades that worsened the market crash.
Trading firm Jane Street is facing a third lawsuit from Terraform Labs over its alleged role in the 2022 LUNA and TerraUSD crash. The new lawsuit was also filed by the company’s court-appointed administrator, Todd Snyder, who is working to recover money for creditors after Terraform went bankrupt.
According to court records, the first lawsuit was filed on February 23, 2026, in a Manhattan federal court. Parts of the complaint were hidden from the public, but the filing claims that Jane Street’s trading activity may have played a role in worsening the collapse of TerraUSD and LUNA back in May 2022. The complaint focuses on whether the trading firm had access to private information connected to Terraform’s internal actions before the market crash.
Just one day later, on February 24, a second lawsuit was filed under seal, meaning the details are not publicly available. This case was assigned to federal judge Dale E. Ho. Around the same period, another related filing appeared before Judge Andrew L. Carter Jr., bringing the total number of connected lawsuits to three. The multiple filings quickly drew attention because they all relate to the same Terra collapse but are being handled in separate legal actions.
Insider trading allegations
The lawsuits claim that Jane Street and some of its employees may have used “material non-public information,” which simply means private information that was not available to the public at the time.
According to the complaint, this information may have helped the firm decide when to sell TerraUSD tokens when the market was sensitive. The filing says that large trades happened shortly before the ecosystem started to break down, which increased selling pressure and made the crash spread faster.
Snyder said the legal actions are being taken to recover funds for people affected by the collapse. He stated that the case is meant to pursue claims “on behalf of injured parties” and to examine trading activity that happened during one of the biggest events in crypto history. The lawsuit named Jane Street co-founder Robert Granieri and employees Bryce Pratt and Michael Huang.
Jane Street responds to the lawsuit
Jane Street has denied the claims and said it will defend itself in court. According to a previous report, the firm said that the case is “baseless, opportunistic claims”, and that it is a “desperate attempt to extract money.
The company added that the losses connected to Terra and LUNA were caused by Terraform’s own internal problems and mismanagement, not by outside trading. The company said it followed market rules and did not misuse any information.
What happened with Terraform
Terraform, founded by Do Kwon, collapsed in May 2022 after its algorithmic stablecoin TerraUSD lost its peg to the U.S. dollar. Within days, the LUNA token also crashed, wiping out about $40 billion in market value.
Terraform filed for bankruptcy in 2024, and an administrator was appointed to handle recovery efforts. However, the appearance of three different lawsuits now shows how complex the legal process has become as courts continue to examine what happened during the Terra collapse.
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