Jane Street Lawsuit, Terra Insider Trading Claims Explained

Quick Facts

• The lawsuit was filed February 23, 2026 in Manhattan federal court.
• Plaintiff is Todd Snyder, the administrator winding down bankrupt Terraform Labs.
• Jane Street is accused of using insider information to trade ahead of the public during the May 2022 Terra collapse.
• Jane Street denies all claims and calls them “baseless.”
• The case is in its earliest stage — no hearings have been scheduled and no trial date is set.
• This is not a class action. Retail investors cannot file claims through this lawsuit.

What Is the Jane Street Lawsuit?

The Jane Street lawsuit is a civil case filed by the administrator of bankrupt Terraform Labs, alleging that Jane Street Group — one of Wall Street’s largest trading firms — used confidential information to execute trades that deepened the May 2022 collapse of the TerraUSD stablecoin. The crash wiped out an estimated $40 billion in market value within days. Jane Street denies all allegations. The case was filed in the U.S. District Court for the Southern District of New York and is in its early stages as of February 2026.

Case Overview

Who filed the lawsuit: Todd R. Snyder is the court-appointed plan administrator for Terraform Labs Pte. Ltd. He filed the lawsuit on behalf of the Terraform bankruptcy estate and its creditors — not on behalf of retail investors.

Who is being sued: The defendants are Jane Street Group LLC, co-founder Robert Granieri, and two employees — Bryce Pratt and Michael Huang.

Jane Street is a secretive Wall Street firm known for massively profitable trading strategies. The firm generated $10.1 billion in net trading revenue in Q2 2025 alone — surpassing JPMorgan, Goldman Sachs, and every other major bank.

Court and case number: Snyder v. Jane Street Group LLC, Case No. 1:26-cv-1504, U.S. District Court, Southern District of New York.

Filing date: February 23, 2026.

Background: The lawsuit ties back to one of the most damaging episodes in crypto history — the 2022 Terra Luna collapse. Terraform’s algorithmic stablecoin UST lost its dollar peg and its sister token Luna dropped to near zero, wiping out $40 billion in value. Terraform filed for bankruptcy in January 2024. Terraform founder Do Kwon was sentenced to 15 years in federal prison in December 2025 after pleading guilty to fraud.

What the Lawsuit Alleges

The core allegation — insider trading:

A former Terraform intern allegedly leaked non-public information to Jane Street. On May 7, 2022, Terraform withdrew $150 million in UST from a Curve liquidity pool. Ten minutes later, a wallet linked to Jane Street pulled $85 million — before the public had any knowledge of Terraform’s move.

The complaint argues that Jane Street obtained this advance knowledge through Bryce Pratt, a former Terraform intern who later joined Jane Street full-time. Pratt allegedly used pre-existing insider relationships at Terraform to funnel material non-public information about the company’s internal liquidity decisions to Jane Street traders.

The four legal claims:

Misappropriation of material non-public information — Jane Street allegedly obtained confidential data through a back-channel relationship with Terraform insiders and traded on it before the public could react. Federal securities and commodities laws prohibit using non-public information in exactly this way.

Front-running and market manipulation — These trades allegedly front-ran the market, pushed UST off its $1 peg faster, and deepened the spiral that wiped out $40 billion in value. The complaint argues Jane Street’s activity was not simply smart trading — it was predicated on information no other market participant had.

Breach of confidentiality — Jane Street allegedly converted what began as partnership and investment discussions with Terraform into a back-channel source of material non-public information, then used it to trade against the broader market.

Unjust enrichment — Even if intentional wrongdoing is not proven, the complaint argues Jane Street retained profits it is not equitably entitled to keep, and those gains should be returned to Terraform’s creditors.

Jane Street’s Response

Jane Street rejected what it describes as “baseless, opportunistic claims” related to its role at Terraform Labs, noting that the firm’s stablecoin imploded owing to massive fraud perpetrated by its now-imprisoned founder.

No formal court filing — such as a motion to dismiss or formal answer — has been submitted as of February 27, 2026. Jane Street has 21 days from service of the complaint to respond formally, though extensions are routinely granted in complex commercial litigation.

Current Status

The case was filed just four days ago. It is in the earliest possible stage of federal litigation. The complaint contains heavily redacted sections in the publicly available filing — specific trading volumes and profit figures remain under seal.

No hearing has been scheduled. No discovery has begun. The court has not issued any rulings. For live docket updates, search case number 1:26-cv-1504 at pacer.gov.

Possible Outcomes

Dismissal: Jane Street may argue the complaint fails to state a valid legal claim — for example, that UST and Luna were not legally defined “securities” subject to insider trading law. Courts are still working out how traditional securities rules apply to crypto tokens.

Settlement: Jane Street previously settled a trade secrets lawsuit against Millennium Management in December 2024 on undisclosed terms. A settlement in this case is possible at any stage but would require court approval given the bankruptcy context.

Trial: If the case reaches trial, a jury or judge would evaluate evidence of the alleged back-channel communications and trading conduct. Damages would be assessed separately.

Appeal: Either party can appeal a final judgment to the U.S. Court of Appeals for the Second Circuit.

Complex financial litigation involving novel legal questions — like whether crypto insider trading rules apply here — typically takes years to resolve. No outcome is predictable at this stage.

What This Lawsuit Means for Others

This case is one of several actions the Terraform wind-down administrator has filed to recover funds for creditors. A separate $4 billion lawsuit was filed against Jump Trading in December 2025 on related allegations.

Jane Street has also faced scrutiny on other fronts. In July 2025, Indian regulators fined the firm $540 million over derivatives manipulation allegations. That matter is entirely separate from the Terraform lawsuit.

For retail investors who lost money in the Terra collapse, this lawsuit does not open a path to personal recovery. It is brought by the bankruptcy estate on behalf of registered creditors only. If you held TerraUSD or Luna and believe you have a claim, review the Terraform bankruptcy creditor process or consult a securities attorney. For a broader overview of how cryptocurrency investor claims work, see our related article on Crypto Investor Rights and Litigation.

Key Dates

Frequently Asked Questions

Has the Jane Street lawsuit been decided? 

No. The complaint was filed on February 23, 2026. No hearing has been held and no trial date is set. The case is in its earliest stage. Complex financial litigation typically takes multiple years to resolve.

What is Jane Street accused of? 

Jane Street is accused of obtaining confidential, non-public information from a former Terraform employee and using it to execute profitable trades ahead of the public market during the May 2022 UST collapse. The complaint also alleges market manipulation and unjust enrichment.

What is Jane Street’s response to the lawsuit? 

Jane Street called the claims “baseless” and “opportunistic,” arguing that Terra’s collapse was caused by fraud committed by Terraform’s own management — not by Jane Street’s trading. No formal court response has been filed yet.

When is the next court hearing? 

No hearing has been publicly scheduled as of February 27, 2026. Check the federal docket at pacer.gov using case number 1:26-cv-1504 in the Southern District of New York for the latest updates.

Who filed the lawsuit against Jane Street?

 Todd R. Snyder, the court-appointed bankruptcy administrator for Terraform Labs, filed the lawsuit. He acts on behalf of the Terraform wind-down trust and its registered creditors — not on behalf of general retail investors.

Can I get money from this lawsuit if I lost money in Terra? 

No. This is a bankruptcy recovery action, not a public class action. Only registered Terraform creditors are represented. If you lost money in the Terra collapse, consult a bankruptcy or securities attorney about your options through the Terraform creditor process.

Is this connected to the Jane Street Bitcoin manipulation theory? 

These are two separate matters. Social media claims that Jane Street systematically dumped Bitcoin every morning to manipulate prices were described by Wall Street veterans and people close to the firm as lacking substance. The Terra lawsuit involves entirely different allegations — insider trading in the UST stablecoin market in May 2022.

Has Jane Street faced legal trouble before? 

Yes. Jane Street filed a trade secrets lawsuit against Millennium Management in April 2024 over an allegedly stolen options strategy. That case settled in December 2024. Separately, Indian regulators issued a $540 million fine against Jane Street in 2025 over derivatives trading allegations. Both matters are separate from the Terraform lawsuit.

Last Updated: February 27, 2026

This article is for informational purposes only and does not constitute legal advice. Legal claims and outcomes depend on specific facts and applicable law. For advice regarding a particular situation, consult a qualified attorney.

About the Author

Sarah Klein, JD, is a licensed attorney and legal content strategist with over 12 years of experience across civil, criminal, family, and regulatory law. At All About Lawyer, she covers a wide range of legal topics — from high-profile lawsuits and courtroom stories to state traffic laws and everyday legal questions — all with a focus on accuracy, clarity, and public understanding.
Her writing blends real legal insight with plain-English explanations, helping readers stay informed and legally aware.
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