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Todd Snyder, the court-appointed administrator for the Terraform Labs bankruptcy estate, has filed an 83-page lawsuit against Jane Street Group in Manhattan federal court. The complaint alleges that the high-frequency trading firm used material non-public information to engage in...

The complaint says Jane Street Group sold $85M UST after a confidential liquidity withdrawal. Terraform Labs claims front-running worsened UST’s depeg and deepened losses. The TerraUSD and LUNA crash erased $40B, expanding scrutiny of major crypto trading firms. The bankruptcy ad...

The Terraform Labs bankruptcy estate has sued quantitative trading giant Jane Street, alleging the firm used non-public information to profit as the TerraUSD stablecoin collapsed in May 2022, according to a docket filed yesterday with the New York Southern District Court. In a report about the lawsuit by the Wall Street Journal, Terraform Labs’ court-appointed administrator, Todd Snyder, stated that Jane Street “abused market relationships” to short the ecosystem during its death spiral, mirroring similar allegations made against Jump Trading late last year. The estate seeks to recover funds for creditors who lost billions during the $40 billion wipeout of the Terra ecosystem. Key Takeaways The lawsuit alleges Jane Street exploited private liquidity data to profit from the TerraUSD depeg before the public was aware. Terraform’s estate claims the trading firm netted millions by front-running a critical $150 million liquidity withdrawal from Curve. Jane Street has dismissed the suit as a “desperate” attempt to extract money from legitimate market activities. Estate Targets “Privileged Access” in Crash Recovery The lawsuit centers on specific maneuvers executed in May 2022, just as the algorithmic stablecoin UST began to lose its peg to the US dollar. Terraform Labs’ court-appointed plan administrator, Todd Snyder, alleges that Jane Street capitalized on vulnerabilities in Terra’s mint-and-burn mechanism via manipulative trades. And there it is: Jane Street was behind the 2022 crypto winter, destroying Terraform by first depegging the token and destroying the ecosystem, then pretending it would rescue Terra, while effectively it was soaking up what little value remained. pic.twitter.com/Wo9HnBHAoP — zerohedge (@zerohedge) February 24, 2026 “Jane Street abused market relationships to rig the market in its favor during one of the most consequential events in crypto history,” Snyder claimed in his statement to WSJ. The estate argues that these trades were not merely shrewd market moves but were predicated on non-public information regarding Terraform’s internal liquidity management. The legal action is part of a broader recovery effort following the firm’s Chapter 11 bankruptcy filing, which listed assets and liabilities between $100 million and $500 million , a fraction of the market value destroyed during the collapse. Discover: The best new crypto to buy Inside the Curve Pool Incident The complaint reportedly highlights a pivotal sequence of events involving the Curve3pool, a critical liquidity venue for stablecoins. According to the filing, Terraform Labs executed an unannounced withdrawal of $150 million from the pool to adjust liquidity. Less than 10 minutes later, a wallet allegedly linked to Jane Street withdrew $85 million. The estate argues this timing indicates Jane Street possessed “advance insight” into Terraform’s operations, using that data to position itself ahead of the resulting market panic. This mirrors the scrutiny placed on liquidity shifts in current markets, where traders obsessively monitor order books and Polymarket odds for a Bitcoin price drop to detect institutional positioning before price action hits. Jane Street firmly denies the allegations. Implications for DeFi and Stablecoin Regulation If the court finds merit in the “misappropriation theory” applied to DeFi protocols, it could redefine the legal obligations of market makers in the crypto sector. The suit suggests that “privileged access” in decentralized finance is a legal liability, not just a competitive edge. This legal battle arrives as the regulatory environment for stablecoins intensifies. While the 2022 collapse serves as a cautionary tale, modern stablecoins drive $1 trillion in T-bill demand , creating a different set of systemic risks and incentives. Regulators are currently scrutinizing how private trading firms interact with issuer protocols. The outcome could also accelerate legislative frameworks. As odds spike for stablecoin talks regarding the Clarity Act, lawmakers may cite these allegations to demand stricter separation between protocol issuers and market makers. What Comes Next The case now moves to the discovery phase in Delaware, where Jane Street will be required to produce communications regarding its 2022 trading strategies. This follows a similar $4 billion lawsuit filed by Terraform Labs against Jump Trading in December , which accused the firm of materially contributing to the Terra ecosystem’s instability. Major Update in Terraform Labs Bankruptcy: Plan Administrator Files Lawsuit Against Jump Trading! On Dec 18, 2025, a bombshell complaint was dropped in Illinois federal court (Case 1:25-cv-15414) targeting Jump Trading, its ex-Crypto president Kanav Kariya, and even Do Kwon… pic.twitter.com/3uhmVNBCzF — Z3r0w Traders (@_Z3r0wTraders) February 18, 2026 It looks like Terraform is entering a protracted battle on at least two different fronts that could peel back the curtain on high-frequency trading strategies during crypto market crises. Discover: The best pre-launch token sales around The post Terraform Estate Sues Jane Street Over Trades Tied to 2022 Crypto Collapse appeared first on Cryptonews .

Zcash price has dropped over 20% in the past 7 days as the broader crypto market remained in a downtrend. The privacy token now risks a drop to $200 as a death cross appears to have taken shape on the…

On Monday, Todd Snyder, the court-appointed administrator for Terraform Labs, filed suit in Manhattan federal court against Jane Street

The administrator overseeing the bankruptcy of Terraform Labs has launched a lawsuit against trading firm Jane Street, alleging that the firm used confidential information to trade ahead of the collapse of the Terra ecosystem. The complaint, filed in Manhattan federal court, claims the trading activity intensified market stress as TerraUSD was losing its peg to the US dollar in May 2022. The case adds a new legal chapter to the fallout from one of the largest failures in crypto history. Terraform’s collapse erased about $40 billion in market value and triggered turmoil across digital asset markets. Insider trading claims On Monday, Todd Snyder, the court-appointed administrator for Terraform’s bankruptcy, sued Jane Street , its co-founder Robert Granieri, and employees Bryce Pratt and Michael Huang. The complaint accuses them of misappropriating confidential information and manipulating market prices linked to the Terra blockchain. The heavily redacted filing alleges that Jane Street used connections with Terraform insiders to obtain material non-public information. According to the complaint, the firm relied on that information to sell tokens tied to the Terra ecosystem before the crash. Jane Street said the lawsuit was an attempt to extract money and argued that losses suffered by Terra and Luna holders resulted from a multi-billion-dollar fraud committed by Terraform Labs management. Trading contacts The lawsuit traces the relationship between the two firms back to 2018, when Jane Street onboarded Terraform for trading. However, the complaint states that significant Terra token trading did not begin until 2022. Snyder alleges that Pratt, a former Terraform intern who later worked at Jane Street, reestablished communication with former colleagues. The filing claims he set up communications with Terraform’s business development lead, which allegedly became a back-channel source of material non-public information. The complaint further alleges that Pratt created a group chat with Terraform co-founder Do Kwon during the period when TerraUSD was under pressure. Liquidity pool sales Central to the case are events on May 7, 2022. According to the lawsuit, Terraform withdrew 150 million TerraUSD tokens from a liquidity pool used for stablecoin trading without publicly announcing the move. The complaint claims that within 10 minutes of that withdrawal, a wallet allegedly linked to Jane Street withdrew 85 million TerraUSD from the same liquidity pool. The complaint alleges that it triggered a fire sale that led to the collapse of the Terra ecosystem. Snyder argues that Jane Street used sensitive information not available to the broader market to reduce its exposure by selling hundreds of millions of dollars in potential losses hours before the system unravelled. The lawsuit also alleges that the firm continued to use confidential insights to inform trading decisions as TerraUSD fell further from its dollar peg. Terraform filed for bankruptcy in the US in 2024. Its co-founder, Do Kwon, was later arrested and pleaded guilty in the US to two fraud charges. He was sentenced to 15 years in prison in December. Snyder is seeking damages, disgorgement, and interest from Jane Street and has requested a jury trial in Manhattan federal court. The post Terraform bankruptcy lawsuit targets Jane Street over Terra collapse appeared first on Invezz

Bitcoin is struggling to hold the $65,000 level as market sentiment drifts toward apathy following weeks of muted price action and declining participation. Volatility has compressed noticeably, and traders appear hesitant to commit fresh capital while macro uncertainty and liquidity constraints continue to weigh on risk assets. The lack of decisive momentum has left Bitcoin consolidating near a technically sensitive zone, where both bulls and bears seem reluctant to take aggressive positions. A recent CryptoQuant report provides additional context through on-chain positioning data. According to the analysis, during the early February correction, the indicator dropped to roughly -0.0016, reflecting measurable weakness in underlying network activity. This development occurred after Bitcoin had already closed below the Anchored Volume Weighted Average Price (AVWAP) tied to the most recent halving on the weekly timeframe — a level often monitored as a structural reference for market positioning. Trading below this anchored metric suggests reduced conviction among market participants and potentially weaker cost-basis support. While such conditions do not necessarily imply imminent downside, they typically correspond with transitional phases marked by uncertainty, subdued participation, and cautious capital deployment as the market searches for directional clarity. Bearish Confluence Signals Echo Prior Cycle Dynamics The report highlights that the last comparable bearish confluence following an all-time high occurred in May 2022, a period that ultimately preceded a prolonged corrective phase. According to the analysis, this comparison is based on a combination of structural indicators rather than isolated price action, specifically the BTC Growth Rate Difference between Market Cap and Realized Cap — an indicator developed by CryptoQuant CEO Ki Young Ju — alongside Anchored VWAP levels tied to the third and fourth Bitcoin halvings. The Growth Rate Difference metric evaluates whether market capitalization expansion is outpacing the underlying realized capitalization, which reflects the aggregated cost basis of coins on-chain. When this gap narrows or turns negative, it often signals weakening speculative momentum and reduced capital inflows relative to existing holder positioning. At the same time, Bitcoin trading below key halving-anchored AVWAP levels suggests diminished structural support from long-term cost bases. Historically, these levels have functioned as reference zones for institutional and macro-oriented investors. Together, these indicators do not guarantee further downside, but they do indicate a fragile market structure. Such conditions typically require either renewed liquidity inflows or sustained accumulation before a convincing recovery phase can develop. Bitcoin Price Tests Key Support As Downtrend Persists Bitcoin’s weekly structure continues to reflect a corrective phase, with price struggling to stabilize near the mid-$60,000 range after a sharp rejection from the $110,000–$120,000 zone seen late last year. The chart shows a clear transition from bullish expansion to distribution, followed by a sustained sequence of lower highs and lower lows — a pattern typically associated with weakening momentum rather than consolidation. Technically, Bitcoin is now trading below major moving averages that previously acted as dynamic support. The shorter-term average has already rolled over decisively, while the longer-term trend line remains upward sloping but increasingly distant from current price action. Sustained trading beneath these levels usually reflects cautious sentiment and reduced upside conviction. Volume spikes during recent selloffs suggest active distribution rather than passive drift lower. However, declining participation afterward could indicate partial exhaustion of aggressive sellers, potentially opening the door for a stabilization phase if demand returns. From a structural perspective, the $60,000–$62,000 zone appears to function as immediate support, while the $70,000–$75,000 range represents the first meaningful resistance band. Unless Bitcoin decisively reclaims higher levels with strong volume, the broader trend remains fragile, with consolidation or additional downside risk still plausible. Featured image from ChatGPT, chart from TradingView.com

Terraform Labs administrator Todd Snyder accused Jane Street of communicating with the now-collapsed firm and trading on the information, hastening its collapse.

BitcoinWorld Terraform Labs Lawsuit: Explosive Legal Battle Targets Jane Street Over TerraUSD Catastrophe In a stunning legal development shaking the cryptocurrency industry, bankrupt Terraform Labs has launched an explosive lawsuit against prominent U.S. market maker Jane Street Group. This legal action directly connects to the catastrophic collapse of TerraUSD (UST) and Luna (LUNA) in May 2022. The lawsuit, filed in Delaware bankruptcy court, represents a significant escalation in the ongoing fallout from one of crypto’s most devastating failures. Terraform Labs Lawsuit Details and Core Allegations Terraform Labs filed its complaint against Jane Street on April 15, 2025, according to court documents. The company alleges the market maker engaged in activities that contributed to the destabilization of the TerraUSD algorithmic stablecoin. Specifically, the lawsuit claims Jane Street executed trading strategies that exploited vulnerabilities in Terra’s ecosystem. Market makers provide liquidity by continuously buying and selling assets. They profit from the spread between bid and ask prices. Jane Street, founded in 2000, operates as one of the world’s largest quantitative trading firms. The company manages approximately $50 billion in assets across global markets. The legal filing contains several key allegations against Jane Street: Manipulative Trading Practices: Alleged coordinated selling pressure on UST and LUNA Algorithm Exploitation: Claims of targeting Terra’s mint-and-burn mechanisms Market Impact: Accusations of amplifying the downward spiral during May 2022 Breach of Duty: Allegations of violating market integrity principles Historical Context: The Terra Ecosystem Collapse The Terra blockchain ecosystem experienced a complete meltdown in May 2022. This event triggered approximately $40 billion in market value destruction. TerraUSD (UST) operated as an algorithmic stablecoin theoretically pegged to $1. It maintained this peg through a complex mint-and-burn mechanism with its sister token Luna. When UST lost its dollar peg on May 7, 2022, a death spiral ensued. The algorithmic mechanism required massive Luna minting to restore the peg. This minting created hyperinflationary pressure on Luna’s supply. Consequently, Luna’s price collapsed from over $80 to fractions of a cent within days. Terra Collapse Timeline and Impact Date Event Market Impact May 7, 2022 UST loses dollar peg Initial 10% devaluation May 9-10, 2022 Death spiral acceleration Luna drops 99.9% May 12, 2022 Terra blockchain halted Complete ecosystem freeze July 2022 Terraform Labs files bankruptcy $40B total losses Expert Analysis of Market Maker Roles Financial regulation experts provide crucial context about market maker responsibilities. “Market makers operate under specific regulatory frameworks,” explains Dr. Elena Rodriguez, financial law professor at Stanford University. “They must balance profit motives with market stability obligations.” Jane Street reportedly executed substantial UST and Luna trades during the critical collapse period. The lawsuit suggests these trades exceeded normal market-making activities. Instead, they allegedly contributed to the peg-breaking pressure. Legal Precedents and Regulatory Implications This lawsuit establishes important legal territory for cryptocurrency litigation. Previous crypto cases typically targeted exchanges or token issuers. Now, market participants like Jane Street face direct legal action for alleged market impact. The case raises fundamental questions about liability in decentralized finance. Algorithmic stablecoins operate without traditional reserve backing. Their stability depends entirely on market mechanisms and participant behavior. This creates complex legal questions about responsibility during failures. Regulatory bodies worldwide monitor this case closely. The Securities and Exchange Commission (SEC) already charged Terraform Labs and founder Do Kwon with fraud in 2023. This new lawsuit adds another dimension to the regulatory landscape. Broader Impact on Cryptocurrency Markets The Terraform Labs lawsuit against Jane Street carries significant implications for crypto market structure. Market makers provide essential liquidity across cryptocurrency exchanges. Legal actions against them could alter how these firms operate in digital asset markets. Several potential outcomes could reshape the industry: Increased Compliance Costs: Market makers may implement stricter controls Reduced Liquidity: Firms might limit crypto market participation Regulatory Clarification: Case could establish clearer legal standards Investor Protection: Potential precedents for future investor claims Market data shows Jane Street remains active in cryptocurrency trading despite the lawsuit. The firm continues providing liquidity across major exchanges. However, industry sources indicate increased caution around algorithmic stablecoins. Bankruptcy Proceedings and Creditor Recovery Terraform Labs filed for Chapter 11 bankruptcy protection in July 2022. The company listed assets between $100-$500 million against liabilities of $100-$500 million. This lawsuit represents part of bankruptcy estate recovery efforts. Bankruptcy trustees pursue legal actions to maximize creditor recoveries. Successful litigation against deep-pocketed defendants like Jane Street could provide meaningful recoveries. However, legal experts caution about proving causation in complex market events. Comparative Analysis: Similar Financial Litigation Historical financial litigation provides context for this case. The 2010 “Flash Crash” involved similar allegations against high-frequency traders. Regulators ultimately brought cases against several firms for market manipulation. More recently, cryptocurrency exchange FTX’s collapse generated numerous lawsuits. These cases target various market participants including market makers, lenders, and promoters. The Jane Street lawsuit continues this trend of expanding liability in crypto failures. Key differences exist between traditional and crypto market cases. Cryptocurrency markets operate 24/7 with global participation. They lack centralized price discovery mechanisms present in traditional markets. These differences complicate legal analysis of market impact. Conclusion The Terraform Labs lawsuit against Jane Street represents a pivotal moment in cryptocurrency litigation. This legal battle connects traditional finance participants with algorithmic stablecoin failures. The case’s outcome will influence market maker behavior, regulatory approaches, and investor protection standards. As bankruptcy proceedings continue, this lawsuit highlights the complex web of responsibility in decentralized finance. Market participants now face increased scrutiny for their roles during market crises. The Terraform Labs lawsuit against Jane Street will undoubtedly shape cryptocurrency market structure for years to come. FAQs Q1: What specific allegations does Terraform Labs make against Jane Street? The lawsuit alleges Jane Street engaged in manipulative trading practices that exploited Terra’s algorithmic mechanisms, contributing to UST’s depegging and the subsequent ecosystem collapse. Q2: How might this lawsuit affect other cryptocurrency market makers? Other market makers may implement stricter compliance measures and trading limits, potentially reducing liquidity in certain cryptocurrency markets while increasing operational costs. Q3: What legal precedents could this case establish? The case could establish important precedents regarding market maker liability in decentralized finance, algorithmic stablecoin regulation, and causation standards in complex market events. Q4: How does this relate to previous regulatory actions against Terraform Labs? The SEC already charged Terraform Labs and founder Do Kwon with fraud in 2023. This lawsuit represents a separate civil action seeking financial recovery for the bankruptcy estate. Q5: What are the potential outcomes for investors affected by the Terra collapse? Successful litigation could provide some recovery for creditors and investors through the bankruptcy process, though complete recovery remains unlikely given the scale of losses. This post Terraform Labs Lawsuit: Explosive Legal Battle Targets Jane Street Over TerraUSD Catastrophe first appeared on BitcoinWorld .