A new federal lawsuit in Manhattan alleges that Jane Street used a private Telegram channel to offload $192 million worth of TerraUSD (UST) just before the stablecoin lost its peg in May 2022. The complaint, filed by the administrator winding down Terraform Labs, claims the trading firm made around $134 million by betting against UST as the Terra ecosystem imploded.
The suit specifically names Jane Street co-founder Robert Granieri and trader Michael Huang, along with a former Terraform intern who later joined Jane Street. According to the complaint, this intern allegedly passed non-public information through the Telegram group, allowing the firm to sell ahead of the depegging event. On May 7, 2022, Jane Street reportedly sold 85 million UST just minutes after Terraform removed 150 million from a critical Curve pool.
A spokesperson for Jane Street dismissed the allegations, calling the lawsuit a transparent effort to extract money. They emphasized that the losses suffered by Terra and Luna holders resulted from a massive fraud by Terraform Labs management, not from Jane Street’s actions. The firm previously filed a motion in April 2026 to dismiss the case with prejudice, arguing that its trading was based on publicly available information and citing the Wagoner rule, which restricts bankruptcy estates from suing third parties for losses tied to the debtor’s own misconduct. The court has yet to rule on the motion.
The case gains legal traction from a 2023 ruling that deemed UST and Luna as securities, strengthening the securities fraud claims against Jane Street. Separately, Terraform’s administrator sued Jane Street in February 2026 over front-running allegations linked to the Curve pool withdrawal. Do Kwon, Terraform’s co-founder, has pleaded guilty to conspiracy and wire fraud and is serving a 15-year prison sentence. Administrator Todd Snyder previously stated that Jane Street’s trades accelerated the collapse by draining liquidity and worsening market panic.