USDJane Street Accused of Terra Backchannel Trades
Terraform filing alleges secret Telegram access before UST collapse
TL;DR
- Terraform alleges Jane Street used a private Telegram backchannel before TerraUSD collapsed.
- Jane Street denies the claims and says Terraform’s own fraud caused investor losses.
- The filing says some trading activity remains unresolved, including who made a major Curve swap.
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Terraform Labs administrator Todd Snyder alleges Jane Street traders used a private Telegram backchannel with Terraform insiders before selling a TerraUSD position shortly before UST began collapsing in May 2022, according to an amended complaint that accuses the firm and named traders of profiting from confidential information.
The amended complaint names Jane Street, co-founder Robert Granieri, Bryce Pratt, and Michael Huang. It accuses them of insider trading, shorting Terra tokens, misappropriating confidential information, and manipulating market prices during Terra’s collapse, which the filing describes as a roughly $40 billion event.
The alleged Telegram group was called “Bryce’s Secret,” named after Pratt, a former Terraform intern who later became a systems developer at Jane Street. The filing says the chat was created on February 22, 2022, between Pratt and two former Terraform colleagues, including Terraform’s Head of Business Development.
One participant allegedly told Pratt, “bro we all know who the buyer is. its where u work,” before naming “Jane Streeeeeeeet,” according to the filing. The complaint also alleges Pratt continued asking Terraform contacts for “defi info” that Jane Street was “very hungry for,” including Telegram requests marked “don’t share pls.”
Filing details alleged trades before the depeg
Terraform’s filing says Jane Street used “Bryce’s Secret” and other backchannel sources of nonpublic information to front-run trading that allegedly hastened Terraform’s collapse. The complaint alleges Jane Street unstaked and sold its entire UST position effectively at the dollar peg shortly before UST began losing that peg.
The filing does not identify the entity behind the Curve 3pool swap, leaving the operator undisclosed. Terraform’s complaint also alleges Jane Street tried to “minimize this kind of visibility going forward” by decommissioning wallets tied to the trades after a Blocktower contact said an onchain analytics group had concluded Jane Street “made a ‘killing’” on its activity.
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Jane Street denies the allegations
Snyder first sued Jane Street, Granieri, Pratt, and Huang in Manhattan federal court on February 23, accusing them of misappropriating confidential information and manipulating market prices. Jane Street moved to dismiss the original lawsuit in April, arguing Terraform’s bankruptcy estate was trying to shift blame and extract cash for losses caused by Terraform’s own fraud.
A Jane Street spokesperson called the suit a “transparent attempt to extract money” and said Terra and LUNA holder losses resulted from “a multi-billion dollar fraud perpetrated by the management of Terraform Labs.” The spokesperson also said Jane Street would “defend ourselves vigorously against these baseless, opportunistic claims.”
Snyder is seeking recovery of alleged wrongful gains from Jane Street, plus additional damages intended for Terraform creditors and investors who lost funds in the Terra collapse. The amended complaint expands the February lawsuit and is described as the second major case brought by Terraform’s wind-down trust against a high-frequency trading firm tied to the Terra ecosystem’s collapse.
TerraUSD lost its dollar peg, while sister token LUNA fell from above $60 to fractions of a cent within days. The Terra implosion triggered broader crypto contagion that contributed to the failures of Celsius, Three Arrows Capital, Voyager, and eventually FTX, while erasing trillions in market value.
Terraform sought Chapter 11 protection in Delaware in January 2024, and a wind-down trust was later established to pursue recoveries for creditors. Do Kwon, Terraform’s co-founder, was extradited from Montenegro to face U.S. charges, pleaded guilty to conspiracy and wire fraud in December, and is serving a 15-year prison sentence.
Nic Puckrin, macro analyst and co-founder of Coin Bureau, said insider trading is hard to police in crypto because “the lines between market-making, privileged information flows and informal communication channels have historically been more blurred.” Puckrin added that crypto’s advantage over traditional finance is “transparent on-chain data,” because visibility can help investigators trace fund flows, trading patterns, and wallet activity to prove or disprove allegations.
Jane Street was described as the world’s leading quantitative trading firm by net trading revenue, with $39.6 billion generated in 2025.
FAQ
Who filed the amended complaint?
Terraform Labs administrator Todd Snyder filed it.
What was “Bryce’s Secret”?
A private Telegram group allegedly linking Pratt with former Terraform colleagues.
What remains unresolved?
The filing does not identify who made the major Curve 3pool swap.
How did Jane Street respond?
Jane Street called the claims baseless and said it would defend itself vigorously.
This article has been refined and enhanced by ChatGPT.
