Jane Street Caught in a Scandalous Web of Crypto Chaos – Insider Trading Alleged!

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Oh, what a tangled web we weave! Terraform Labs, in the midst of a mighty bankruptcy mess, has decided to point the finger at Jane Street. The charge? That they used insider gossip to profit from the grand Terra-Luna disaster. Yes, while the crypto world was busy tumbling into chaos, Jane Street allegedly capitalized on this fall from grace-talk about bad manners!

The lawsuit, filed by the administrator of Terraform’s bankruptcy, accuses Jane Street of being in cahoots with insiders, using secret knowledge to speed up the catastrophe and rack up profits while leaving investors and creditors to mop up the billions lost in the wreckage. The poor souls lost everything-except their misplaced hope in digital coins, of course.

Jane Street’s Defense: “Not Our Fault, Really”

According to a report from the Wall Street Journal, Todd Snyder, the poor guy tasked with cleaning up Terraform’s mess, is now going after Jane Street. They’re accused of knowing more than they should have, and using this secret information to make some very profitable moves. These aren’t just simple trades, mind you. No, these were the kind that could make even the most experienced crypto trader feel a little queasy.

The complaint, filed in a Manhattan court, claims that Jane Street’s sneaky insiders-specifically one Bryce Pratt, a former intern turned trade wizard-were busy chatting in secret groups like “Bryce’s Secret” and sharing all sorts of confidential tidbits. Meanwhile, Jane Street is denying it all, calling the accusations a ‘desperate cash grab.’ Oh, the drama!

“Jane Street abused market relationships to rig the market in its favor during one of the most consequential events in crypto history,” said the administrator. Well, that’s one way to put it.

Jane Street, it seems, got involved with Terraform in 2018 but really started digging into the project’s token goldmine in 2022. And that’s when the alleged secret talks started. Oh, the plot thickens!

Pratt, who once interned at Terraform, allegedly masterminded a sneaky little private chat room to gather juicy insider info. Think of it as the kind of chat room your mum would warn you about. Except this one involved highly profitable trades. And these were no ordinary emails-no, they were email introductions between Terraform’s bigwigs and Jane Street’s DeFi team. A little too cozy, don’t you think?

But of course, Jane Street isn’t having it. They’re calling the lawsuit “baseless” and blaming the whole fiasco on Terraform’s mismanagement. It’s a bit like blaming the chef for the burnt cake, isn’t it?

Did Jane Street Help Speed Up Terraform’s Collapse?

The plot thickens further when we look at an incident on May 7, 2022. Terraform made a secretive withdrawal of 150 million TerraUSD from the Curve3pool without so much as a “by your leave” to the market. Ten minutes later, a wallet allegedly linked to Jane Street withdrew a cool 85 million TerraUSD. Coincidence? You be the judge. Terraform’s founder Do Kwon says it was all part of a “move to a new liquidity pool for stablecoins.” Sure, Do. Whatever you say.

Then, just days later, as the TerraUSD began to lose its dollar peg and collapse, Pratt supposedly set up another secret chat to discuss bids on Luna. Well, of course he did. Might as well make some extra cash while the ship is sinking, right?

And sink it did. Terraform crumbled later that month, and in the blink of an eye, TerraUSD lost its dollar peg and Luna went from ‘good as gold’ to ‘worthless as a soggy paper napkin.’ The whole collapse wiped out a staggering $40 billion and left hundreds of thousands of investors wringing their hands. Terraform filed for bankruptcy in January 2024, with a formal wind-down trust coming later that year. Oh, and Do Kwon? He’s now serving a 15-year sentence for fraud. At least he’s got plenty of time to think about his decisions.

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2026-02-25 01:30