Jane Street accused of using Terra Telegram backchannel before UST crash
Written by Zoltan Vardai, Staff Writer. Reviewed by Bryan O'Shea, Staff Editor. Written by Zoltan Vardai, Staff Writer. Reviewed by Bryan O'Shea, Staff Editor. Jane Street accused of using Terra Telegram backchannel before UST crashLatest NewsPublishedMay 21, 2026The private Telegram backchannel allegedly allowed Jane Street to unwind hundreds of millions in potential exposure “mere hours before” the Terra ecosystem’s $40 billion collapse.
A newly unsealed court filing in the Terraform Labs bankruptcy case alleges Jane Street used a private Telegram channel with former Terraform intern Bryce Pratt to obtain nonpublic information before the collapse of TerraUSD. Pratt is currently a systems developer at Jane Street.
The channel, called “Bryce’s Secret,” allegedly gave the quantitative trading firm a backchannel to Terraform insiders as Jane Street unwound exposure to TerraUSD (UST) shortly before the algorithmic stablecoin lost its dollar peg in May 2022, according to the filing. “Jane Street used Bryce’s Secret chat group and other backchannel sources of non-public information to front-run trading that hastened the collapse of Terraform,” the filing states.
The claims renew scrutiny of who profited from Terra’s $40 billion collapse, one of the crypto industry’s largest failures, and could test how traditional insider trading and market manipulation theories apply to decentralized finance markets.
On Feb. 23, Todd Snyder, Terraform’s court-appointed administrator, sued Jane Street, its co-founder Robert Granieri, and employees Bryce Pratt and Michael Huang in Manhattan federal court, accusing them of “misappropriating confidential information and manipulating market prices.”
Two months later, Jane Street filed a motion to dismiss the lawsuit, arguing that Terraform attempted to “extract cash from Jane Street to foot the bill for a fraud that Terraform itself perpetrated on the market,” Cointelegraph reported on April 23.
A spokesperson for Jane Street told Cointelegraph that the lawsuit was 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.”
Terraform Labs court filing in the lawsuit against Jane Street. Source: cloudfront.net
Curve trade raises new UST concerns
The timing of a particular UST trade has raised more concerns, suggesting potential access to insider information by an unknown entity.
On May 7, 2022, Terraform quietly withdrew about $150 million in UST from the Curve 3pool liquidity pool.
Less than 10 minutes after Terraform’s withdrawal, Curve 3pool saw its largest single swap of $85 million, precipitating a steep sell-off in UST, which the filing said “ultimately led to the collapse of the Terra ecosystem.”
Related: Analysts reject Jane Street ‘10 a.m. dump’ claims, say Bitcoin isn’t easily manipulated
The heavily redacted filing does not identify the entity behind the swap.
Terraform Labs court filing in the lawsuit against Jane Street. Source: cloudfront.net
Snyder seeks to recover alleged wrongful gains from Jane Street, plus compensation for additional damages to distribute to Terraform creditors and investors who lost funds in the 2022 collapse.
Jane Street is the world’s leading quantitative trading firm by net trading revenue, with $39.6 billion generated in 2025, reported Reuters.
Cointelegraph reached out to Terraform’s court-appointed administrator for comment but had not received a response by publication.
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Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently.More on the subject
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