The crypto scandal continues — Jane Street is at the center of the Terra-Luna collapse case

The liquidator of Terraform Labs has filed a new lawsuit against the American market maker Jane Street, accusing the company of insider trading, which, according to him, accelerated the collapse of the Terra-Luna ecosystem. This was reported by the Wall Street Journal.

The lawsuit was filed by Todd Snyder, who is leading the bankruptcy and liquidation process of Terraform Labs. He claims that Jane Street used confidential information obtained from inside the company for previous operations. In particular, after Terraform Labs withdrew $ 150 million USD from Curve Pool 3 on May 7, 2022, another $ 85 million USD was withdrawn from a wallet linked to Jane Street — before the information became public.

Snyder believes that these transactions brought the company illegal profits and became the catalyst for Terra’s collapse. The lawsuit also mentions Jump Trading, which he had previously accused of disseminating confidential data.

Jane Street rejected the allegations, saying that the losses of Terra and Luna investors were caused by «large-scale fraud by Terraform Labs' management» and promised to vigorously defend itself in court.

Terra’s collapse began in May 2022 after the algorithmic stablecoin TerraUSD (UST) lost its peg to the dollar. This caused the Luna token to fall and a chain reaction in the market that later led to the bankruptcy of FTX. In January 2024, Terraform Labs officially declared bankruptcy, and its founder До Квон" href="https://noworries.news/biography/do-kvon/" data-bio-id="3665">Do Kwon was sentenced to 15 years in prison.