Terraform Estate Sues Jane Street Over Trades Tied to 2022 Crypto Market Collapse: WSJ
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by Vince DioquinoFebruary 24, 2026
AI-Generated Deep Dive Summary
Terraform Estate has filed a lawsuit against Jane Street, alleging that the quantitative trading firm profited from non-public information during the May 2022 collapse of TerraUSD (UST), which precipitated the broader crypto market crash. The complaint centers on claims that Jane Street used confidential insights into Terraform's liquidity decisions to execute profitable trades as UST lost its dollar peg, contributing to the near-eradication of sister token Luna and the failure of major platforms like FTX.
The lawsuit follows a previous legal action against Jump Trading, filed by Terraform Labs' bankruptcy administrator in December 2023. The allegations suggest that Jane Street leveraged privileged access to internal crisis communications within Terraform's "war room" to gain an unfair trading advantage during one of the most significant events in crypto history. This case could set a precedent for how insider liability is applied in decentralized finance (DeFi), potentially broadening the definition of what constitutes actionable insider information.
The legal battle highlights concerns over market integrity and transparency in the crypto sector. If proven, it would establish that entities with access to private, crisis-related communications within a protocol's leadership could face legal accountability for their trading activities. This shift could redefine who qualifies as an "insider" in crypto markets, extending liability beyond traditional corporate executives to anyone privy to critical, non-public information during a crisis.
The implications of this case extend
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Originally published on Decrypt on 2/24/2026