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Terraform Labs sues Jane Street over alleged insider trading tied to the 2022 LUNA collapse, seeking fund recovery for creditors.
Author: Arushi Garg
Steady attention without excessive speculation.
24th February, 2026 – Terraform Labs’ court appointed bankruptcy administrator has filed a lawsuit in Manhattan federal court against Wall Street firm Jane Street, accusing it of insider trading during the May 2022 Terra collapse.
The complaint claims Jane Street received non public information about major liquidity moves, including a large UST withdrawal from Curve, through a former Terraform intern. It alleges the firm quickly reduced hundreds of millions in exposure and made profits while the UST depeg deepened and LUNA lost over $40 billion in value.
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kadir⚡️
@kadrkn
@terra_money When will KROLL compensate us for our losses? There has been no progress for months 🤬
The Office of the Terraform Labs Plan Administrator has filed a lawsuit against Jane Street, alleging insider trading, market manipulation, and deceptive trading practices that contributed to the May 2022 collapse of Terraform Labs. The complaint details how Jane Street
03:26 AM·Feb 24, 2026
Neel
@NeelMacro
@terra_money Do you know, I see that each day at 10 AM ET We even give it the name "Jany 10 AM strategy"
The Office of the Terraform Labs Plan Administrator has filed a lawsuit against Jane Street, alleging insider trading, market manipulation, and deceptive trading practices that contributed to the May 2022 collapse of Terraform Labs. The complaint details how Jane Street
01:48 AM·Feb 24, 2026
TheCryptoButcher
@CryptoButcher1
@terra_money Does this have any bearing on the Kroll repayment that has been going on for a year now?
The Office of the Terraform Labs Plan Administrator has filed a lawsuit against Jane Street, alleging insider trading, market manipulation, and deceptive trading practices that contributed to the May 2022 collapse of Terraform Labs. The complaint details how Jane Street
01:44 AM·Feb 24, 2026
Terraform Labs’ bankruptcy administrator, Todd Snyder, has filed a lawsuit in a Manhattan federal court accusing Jane Street of insider trading during the May 2022 Terra collapse. The complaint says Jane Street received non public information about major liquidity moves, including a large UST withdrawal from Curve, and used it to adjust positions, reduce losses, and profit while the UST depeg worsened and LUNA crashed. The collapse wiped out more than $40 billion in value.
This lawsuit is part of Terraform’s ongoing effort to recover funds for creditors and token holders. A similar multi billion dollar case was previously filed against Jump Trading, along with other legal actions tied to the Terra collapse and Do Kwon. In past cases, market reactions were brief, with short term volatility followed by stabilization, as investors see these lawsuits as bankruptcy recovery steps rather than new systemic risks.
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Key milestones in the Terra collapse and ongoing bankruptcy litigation
UST loses its dollar peg and LUNA crashes 99.9% within days, erasing over $40 billion in market value and triggering a global crypto contagion.
Terraform Labs enters Chapter 11 bankruptcy in Delaware, appointing Todd Snyder to oversee asset recovery and creditor distributions.
The official deadline for LUNA and USTC victims to file loss claims closes, allowing creditors to seek compensation from the bankruptcy estate.
A lawsuit alleges Jump Trading profited from insider access and actions that accelerated the Terra ecosystem’s collapse.
The bankruptcy administrator sues Jane Street, alleging front-running using non-public information that worsened the Terra death spiral.
Terraform Labs’ case against Jane Street is part of its broader Chapter 11 bankruptcy process led by administrator Todd Snyder. The focus is to recover funds allegedly extracted during the 2022 collapse and add them back to the pool for creditors and LUNA and USTC holders awaiting payouts.
By targeting major trading firms, including earlier action against Jump Trading, the estate aims to show certain players had unfair advantages during the crash. Any successful recovery would increase the funds available for distribution, though the process remains slow and ongoing years after the collapse.
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