Jane Street accused via Telegram backchannel before UST crash

A newly unsealed filing in Terraform Labs’ bankruptcy alleges Jane Street used a private Telegram backchannel (“Bryce’s Secret”) with former Terraform intern Bryce Pratt ahead of the May 2022 TerraUSD (UST) collapse. The administrator says the alleged nonpublic information enabled “front-running” and helped unwind large UST exposure hours before UST lost its dollar peg. The suit also points to specific market plumbing: after Terraform allegedly withdrew about $150M in UST from Curve 3pool on May 7, 2022, Curve reportedly saw a largest single swap of roughly $85M within 10 minutes, triggering steep UST sell pressure (the filer did not name the swap executor). On Feb. 23, Todd Snyder sued Jane Street, co-founder Robert Granieri, and employees Bryce Pratt and Michael Huang for misappropriating confidential information and manipulating market prices. Jane Street denies wrongdoing and seeks dismissal, arguing Terraform is trying to make it pay for fraud by Terraform management. For traders, the renewed allegations raise the risk of tighter enforcement and higher legal/regulatory pricing around UST/legacy Terra exposure, while putting liquidity-pool flows and peg-stability mechanics back in focus. In the near term, this can translate into more caution and wider risk premiums for UST-sensitive positioning.