Jane Street rejects Terra Telegram insider trading claims

Jane Street has rejected new insider trading claims centred on a private Telegram channel during the 2022 Terra collapse.

Summary

• A Manhattan complaint accuses Jane Street of using a Telegram channel to exit $192 million of TerraUSD before UST lost its dollar peg.
• The suit names co-founder Robert Granieri and trader Michael Huang alongside a former Terraform intern who allegedly relayed non-public information.
• Jane Street called the complaint a transparent attempt to extract money and said it will defend vigorously against the claims.

A Manhattan federal complaint alleges Jane Street used a private Telegram channel to exit $192 million in TerraUSD before its May 2022 collapse. The suit claims the firm made approximately $134 million betting against the token as Terra’s ecosystem unraveled.

The case was filed by the administrator winding down Terraform Labs and also names Jane Street co-founder Robert Granieri and trader Michael Huang. The complaint alleges a former Terraform intern who later joined Jane Street relayed non-public information through the private channel, enabling the firm to sell ahead of the depeg.

The Telegram backchannel at the centre of the insider trading complaint

On May 7, 2022, Jane Street allegedly sold 85 million UST minutes after Terraform withdrew 150 million from a key Curve pool. Crypto.news has reported on the broader lawsuit, filed in February 2026 by court-appointed administrator Todd Snyder.

“This suit is a transparent attempt to extract money when it is well-established that the losses suffered by Terra and Luna holders were the result of a multi-billion dollar fraud perpetrated by the management of Terraform Labs,” a spokesperson said.

Jane Street asked a Manhattan court in April 2026 to dismiss the case with prejudice, arguing its trading was based on public information. The motion also cited the Wagoner rule, which limits a bankruptcy estate’s ability to sue third parties for losses tied to its own wrongdoing. The court has not yet ruled.

Why the case matters for crypto market regulation

The lawsuit draws on a 2023 ruling that UST and Luna qualified as securities. That precedent strengthens the legal footing for the securities fraud claims against Jane Street.

Terraform’s administrator also separately sued Jane Street in February 2026 over the initial front-running allegations tied to the Curve pool withdrawal.

Do Kwon, Terraform’s co-founder, has pleaded guilty to conspiracy and wire fraud and is serving a 15-year prison sentence. Administrator Todd Snyder previously stated that Jane Street’s trades hastened Terraform’s collapse by draining liquidity and accelerating market panic.