Terraform Lawsuit Accuses Jane Street of Manipulation
A lawsuit from Terraform Labs reportedly alleges that trading firm Jane Street was involved in a market manipulation scheme. The suit claims Jane Street used an algorithm that systematically dumped Bitcoin at 10 a.m. daily to liquidate retail traders. Following the allegations, Jane Street deleted its official X/Twitter account.
- The lawsuit, filed by the administrator of Terraform Labs' bankruptcy estate, alleges that Jane Street utilized non-public information from Terraform insiders to execute trades that hastened the $40 billion collapse of the Terra ecosystem in May 2022. - A central claim revolves around a May 7, 2022, event where Terraform Labs withdrew 150 million TerraUSD from a liquidity pool without a public announcement. Within ten minutes, a wallet linked to Jane Street allegedly withdrew 85 million TerraUSD from the same pool. - The complaint names Jane Street co-founder Robert Granieri and employees Bryce Pratt and Michael Huang as defendants. Pratt, a former Terraform Labs intern, is accused of creating a secret chat group named "Bryce's Secret" to funnel confidential information back to Jane Street. - Jane Street has publicly refuted the allegations, calling the lawsuit a "desperate" and "transparent attempt to extract money." The firm maintains that the losses incurred by Terra and Luna holders were the result of the "multibillion-dollar fraud perpetrated by the management of Terraform Labs." - This is not the only market manipulation allegation Jane Street has recently faced. In July 2025, the Securities and Exchange Board of India (SEBI) accused the firm of a "pump-and-dump" scheme involving Indian stock indices. - The lawsuit is part of a broader effort by the Terraform bankruptcy administrator to recover funds for creditors. A separate $4 billion lawsuit was filed in December 2025 against Jump Trading, another firm alleged to have had a secret deal with Terraform. - Terraform Labs filed for Chapter 11 bankruptcy in January 2024. Its co-founder, Do Kwon, was sentenced to 15 years in prison in December 2025 after pleading guilty to fraud charges. - Coincidentally or not, some crypto traders have noted that a recurring pattern of Bitcoin being sold off at 10 a.m. Eastern Time seemingly ceased after the lawsuit against Jane Street was filed, leading to a significant price jump for Bitcoin and other cryptocurrencies.
