Jane Street faces claims of insider trading that sped up Terraform's 2022 collapse

CoinDesk

by Omkar Godbole

February 24, 2026

AI-Generated Deep Dive Summary

Jane Street, a prominent high-frequency trading firm, has denied allegations of insider trading that allegedly accelerated the collapse of Terraform Labs in 2022. The suit, filed by Todd Snyder, administrator of Terraform Labs, accuses Jane Street and its employees of using nonpublic information to trade ahead of significant events, including the withdrawal of large sums of TerraUSD from the Curve3pool platform. This action is claimed to have triggered a market panic that led to the collapse of the algorithmic stablecoin UST and Luna, resulting in $40 billion in losses. Terraform Labs, known for its Terra blockchain and stablecoins, faced a catastrophic downfall when UST lost its dollar peg in May 2022. The company's management, including co-founder Do Kwon, has been implicated in the collapse, with Kwon sentenced to 15 years in prison for criminal charges. The lawsuit alleges that Jane Street employees communicated directly with Terraform insiders and traded on material, nonpublic information, further exacerbating the market crash. The allegations suggest that Jane Street not only profited from insider trading but also contributed to the financial turmoil faced by investors and crypto companies exposed to Terraform. This legal battle highlights broader concerns about market integrity and accountability in the cryptocurrency space. The case has significant implications for understanding how high-stakes trading practices can influence market outcomes, particularly during periods of extreme volatility. The matter is further complicated by the fact that Jane Street has dismissed the lawsuit as a "desperate" attempt to extract money from them, claiming the losses were due to fraud by Terraform's management. The legal proceedings will likely shed light on whether major players in the crypto ecosystem can be held responsible for actions that harm investors and destabilize markets. For readers interested in cryptocurrency, this story underscores the risks of insider trading, market manipulation, and the potential for massive financial losses when critical information is misused. It also raises questions about regulatory oversight and accountability in a rapidly evolving industry where high-stakes decisions can have far-reaching consequences.

Verticals

cryptofinance

Originally published on CoinDesk on 2/24/2026