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Todd R. Snyder, the court-appointed administrator winding down Terraform's bankruptcy estate, filed the original complaint on February 23, 2026. The suit names Jane Street Group LLC, co-founder Robert Granieri, and employees Bryce Pratt and Michael Huang. It alleges violations of the Commodity Exchange Act, the Securities Exchange Act, fraud, and unjust enrichment. Snyder seeks unspecified damages, disgorgement of profits, and a jury trial.

Jane Street rejected the claims in sharp terms. In its dismissal filing, the firm called the case "This desperate suit is a transparent attempt to extract money," arguing that losses from the Terra collapse were "the result of a multibillion-dollar fraud perpetrated by the management of Terraform Labs." The firm characterized the lawsuit as an effort to "extract cash from Jane Street to foot the bill for a fraud the crypto firm itself perpetrated."

What the Complaint Alleges

The lawsuit centers on a narrow but specific sequence of on-chain activity. On May 7, 2022, Terraform quietly withdrew 150 million UST from the Curve Finance 3pool, a liquidity pool used to maintain UST's dollar peg. No public announcement accompanied the withdrawal. Within approximately 10 minutes, a wallet the complaint allegedly links to Jane Street withdrew an additional 85 million UST from the same pool. Snyder's legal team describes this as "Jane Street's largest-ever single swap" and argues it was "impossible without inside information to which it had unique access."

The alleged conduit was Bryce Pratt, a former Terraform intern who joined Jane Street full-time in September 2021. According to the complaint, Pratt allegedly created a private group chat titled "Bryce's Secret" in February 2022, which included a Terraform software engineer and the company's head of business development. Snyder alleges this chat served as a pipeline for non-public information about Terraform's internal actions.

UST was an algorithmic stablecoin, meaning it was not backed by cash reserves. It maintained its $1 value through a mint-and-burn mechanism with its paired token, LUNA. The Anchor Protocol, a savings product built on the Terra blockchain, offered yields of up to 19.5% annually on UST deposits, drawing in retail investors globally. By April 2022, LUNA's market cap exceeded $40 billion. The token fell from above $120 to effectively zero within days of the May 2022 depeg, triggering a broader crypto market drawdown of more than $450 billion.

Legal and Criminal Context

Terraform co-founder Do Kwon pleaded guilty to wire fraud and securities fraud and was sentenced to 15 years in federal prison in December 2025. Judge Paul A. Engelmayer, describing the fraud as "epic," called the defense's proposed five-year term "utterly unthinkable" and rejected the request outright. Kwon may serve a portion of his remaining time in South Korea, where he faces additional charges carrying up to an additional 40 years of potential imprisonment.

Terraform filed for Chapter 11 bankruptcy in January 2024 and later reached a settlement with the U.S. Securities and Exchange Commission totaling $4.47 billion in penalties. Snyder has pursued parallel litigation to recover assets for creditors. In December 2025, he filed a separate $4 billion lawsuit against Jump Trading, alleging that firm secretly propped up UST in 2021 under advance arrangements with Terraform while earning roughly $1 billion in profits. The complaint further alleges that Jump had access to millions of LUNA tokens purchased at approximately $0.40 each at a time when market prices later exceeded $110.

Regional Stakes: India and Africa

The lawsuit carries particular weight for investors and regulators outside the United States. In India, retail participation in LUNA and UST was substantial relative to market size. Research from Harvard Law and the National Bureau of Economic Research found that less financially sophisticated investors were among the last to exit and absorbed the steepest losses during the collapse, findings the researchers describe as directly relevant to emerging market retail participation.

Jane Street's regulatory proceedings in India add a separate layer of context. In July 2025, India's Securities and Exchange Board (SEBI) banned Jane Street from Indian capital markets, alleging an "intentional, well-planned and sinister scheme" of index derivatives manipulation involving BANKNIFTY options. The firm deposited roughly ₹4,844 crore (approximately $580 million) into an escrow account before the ban was lifted on July 21. SEBI and the Terraform lawsuit are distinct proceedings, but the pattern of regulatory friction facing Jane Street in multiple jurisdictions may be drawing attention from market watchers across South Asia.

In sub-Saharan Africa, where stablecoins accounted for 43% of all crypto transaction volume in 2024 and Nigeria alone recorded nearly $22 billion in stablecoin transactions in the 12 months through June 2024, the 2022 UST collapse is widely credited with accelerating a shift toward fiat-backed alternatives like USDT and USDC, with platforms such as Yellow Card predominantly offering those products in the aftermath. The Terraform lawsuit now raises concrete questions about the conduct of institutional actors during that period, including potential front-running of retail participants, information asymmetry between insiders and public markets, and conflicts of interest among market makers in decentralized protocols. A 2023 paper cited in African Business (November 2025) noted that the Reserve Bank of South Africa had flagged limited regulatory reach over stablecoin issuers, whether domiciled domestically or abroad, as a potential source of systemic spillover risk, a concern this case may reinforce.

What Comes Next

The motion to dismiss is now before U.S. District Court in the Southern District of New York. No findings of fact have been made and Jane Street's liability remains unproven. If the motion fails, the case proceeds to discovery, where on-chain records, wallet attribution data, and communications including the alleged "Bryce's Secret" chat could become part of the evidentiary record. For regulators in Nigeria, Kenya, India, and elsewhere developing frameworks for digital asset oversight, this case could establish a practical template for how market misconduct in decentralized protocols might be traced, documented, and litigated.