Did Jane Street See The Terra Crash Coming? Lawsuit Claims Firm Sold ‘Mere Hours’ Before Collapse

• The court-appointed administrator for Terraform Labs has filed a lawsuit against Jane Street, accusing the investment firm of insider trading.
• The suit claims Jane Street anticipated the collapse and exited its position “mere hours” before the Terra ecosystem unraveled.
• Jane Street called the lawsuit “desperate” and “a transparent attempt to extract money,” according to a Bloomberg report.

The court-appointed bankruptcy administrator for the Terraforms Labs collapse is reportedly suing Jane Street for its role in worsening the 2022 Terra collapse.

Todd Synder, the administrator, has accused the investment firm of insider trading, manipulating market prices, and “misappropriating confidential information.” The suit also names Jane Street co-founder Robert Granieri as well as employees Bryce Pratt and Michael Huang, according to a report by The Wall Street Journal, confirmed by Terra’s Post-Chapter 11 account on X.

A Jane Street spokesperson told Bloomberg that the suit was “desperate” and “a transparent attempt to extract money.” Meanwhile, Snyder claims that Jane Street saw the collapse coming and sold off its stake “mere hours” before the ecosystem collapsed.

Terraform Estate Targets Jane Street

During the last crypto crash in 2022, Terraform went under after its stablecoin TerraUSD lost its peg to the U.S. dollar, and its sister token, Luna, was also wiped out. The collapse set off a chain reaction across the crypto industry, which ultimately led to the downfall of Sam Bankman-Fried’s FTX exchange.

The Singapore-based company filed for bankruptcy in January 2024. It also agreed to pay roughly $4.5 billion to the U.S. Securities and Exchange Commission (SEC) to settle a civil securities law suit. Terraform founder Do Kwon, who started the company in 2018, pleaded guilty in August last year to two criminal counts and was sentenced to 15 years in prison.

The lawsuit against Jane Street comes months after Synder also issued a $4 million lawsuit against Jump Trading for profiting from Terra’s crash. 

Bitcoin Weakness Revives Broader Market Concerns

With Bitcoin (BTC) trading under $70,000 for nearly two weeks and now 50% below its record high of over $126,000 in October, concerns are rising that more projects may be in trouble if Bitcoin’s price drops to $50,000, According to ‘The Big Short’ investor Michael Burry digital asset treasuries like Strategy (MSTR) could fall into a “death spiral.”

Coin token failures hit an all-time high in 2025, with the fourth quarter (Q4) being the worst on record, according to CoinGecko data.

Bitcoin’s price is down 3.3% in the last 24 hours, trading at around $63,200, paring losses after momentarily dipping below $63,000. On Stocktwits, retail sentiment around the apex cryptocurrency dipped lower within ‘bearish’ territory over the past day.

The overall cryptocurrency market fell nearly 3% in the last 24 hours to $2.26 trillion. CoinGlass data showed over $370 million in liquidations, with leveraged long bets accounting for nearly $290 million. 

Read also: Bitcoin's Price Drops Below $63K After IBM's Worst Day In 25 Years – Triggers $370 Million Liquidation Wave

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