Novos documentos judiciais divulgados em um tribunal federal de Manhattanshed light on指控 details about Jane Street's involvement in the TerraUSD collapse. The algorithmic stablecoin from Terraform Labs crashed in May 2022, wiping approximately US$ 40 billion from the crypto market. The recently unsealed version of the lawsuit exposes internal communications, operational details, and alleged existence of a private Telegram channel between Terraform employees and Jane Street's trading desk.
The Federal Lawsuit and New Evidence
The case itself was initially filed in February, when the administrator responsible for Terraform's liquidation sued Jane Street, accusing the firm of profiting from the UST collapse using insider information. The latest development came last week when a less redacted version of the lawsuit was made public, revealing previously hidden details that corroborate the allegations of privileged access to internal data.
The Alleged Backchannel Connection
According to documents cited by CoinDesk, Jane Street's advantage allegedly came through a private backchannel involving Bryce Pratt, a former Terraform intern who later joined Jane Street, and his former colleagues within Do Kwon's company. This flow of information allegedly enabled the firm to exit its UST position near dollar parity before the collapse, subsequently building short positions that generated approximately US$ 134 million in profit as the Terra ecosystem crumbled.
Internal Messages and Trading Tactics
Among the newly revealed excerpts, the lawsuit cites a message where Pratt allegedly told colleagues they should be "slightly pleased" about having an "informational advantage." The filing also claims Jane Street traders discussed how to "disable" wallets after an on-chain analysis firm identified that the firm had "made a lot of money" from the operation.
The Critical Curve Finance Operation
Another point that received additional details involves the operation many analysts consider a trigger for the UST collapse. According to the new version of the complaint, Jane Street sold US$ 85 million in UST on Curve Finance just nine minutes after Terraform discreetly withdrew US$ 150 million in liquidity from the same pool. Since 2022, the market has pointed to a large order on Curve as a crucial piece in breaking the stablecoin's dollar parity. Now, Terraform's administrator claims the wallet used in the operation belonged to Jane Street.
Jane Street's Defense
Jane Street continues to deny the allegations. In a statement, the firm said the lawsuit is a "transparent" attempt to recover money lost from "a billion-dollar fraud perpetrated by Terraform Labs management." The company also classified the claims as "unfounded" and "opportunistic" and requested the court dismiss the case.
Parties Involved and Legal Framework
The lawsuit also cites Jane Street co-founder Robert Granieri and trader Michael Huang, while alleging violations of federal securities laws and the Commodity Exchange Act. The action seeks to recover profits allegedly obtained by the firm to compensate Terraform's creditors.
Terraform Labs and Do Kwon Context
Terraform Labs and its founder, Do Kwon, had already been held accountable in other lawsuits related to the TerraUSD and Luna collapse. In 2024, the company reached a US$ 4.47 billion settlement with the SEC after being accused of deceiving investors about the ecosystem's stability.
Broader Market Implications
The new documents add a different layer to the story: the possibility that major Wall Street firms not only reacted quickly to Terra's collapse but had prior access to internal information that allowed them to exit before the breakdown and profit from it. No decision on the merits of the allegations has been reached yet. However, the revelation of new messages, operations, and internal connections once again places Jane Street at the center of one of the most controversial episodes in recent crypto market history.
