Jane Street Sued Over 2022 Terra/Luna Collapse

- The lawsuit was filed by Todd Snyder, the court-appointed administrator overseeing the bankruptcy of Terraform Labs, and specifically names Jane Street, its co-founder Robert Granieri, and employees Bryce Pratt and Michael Huang as defendants. - At the heart of the allegations is a former Terraform Labs intern, Bryce Pratt, who later joined Jane Street. The lawsuit claims he created a private communication channel, nicknamed "Bryce's Secret," to feed material non-public information from his former colleagues back to Jane Street. - The complaint points to a critical event on May 7, 2022, when Terraform Labs withdrew 150 million TerraUSD from a liquidity pool without a public announcement. Less than 10 minutes later, a wallet allegedly linked to Jane Street made a large withdrawal of 85 million TerraUSD from the same pool, a move the lawsuit claims was based on inside information. - Jane Street has publicly refuted the claims, calling the lawsuit a "desperate suit" and a "transparent attempt to extract money." The firm argues that the catastrophic losses were a result of the "multibillion-dollar fraud perpetrated by the management of Terraform Labs." - This legal action is not isolated; the Terraform Labs administrator also filed a similar lawsuit against another high-frequency trading firm, Jump Trading. That earlier suit alleges Jump Trading secretly agreed to prop up TerraUSD before its collapse and made billions in the process. - The lawsuit against Jane Street seeks damages, disgorgement of profits, and a jury trial, citing violations of the Commodity Exchange Act and Securities Exchange Act, as well as fraud and unjust enrichment.