Terraform bankruptcy custodian sues Jane Street for insider trading claims
Todd Snyder, the bankruptcy court–appointed liquidator for Terraform Labs (founded by Do Kwon), has filed a lawsuit against market maker Jane Street and three individuals — co‑founder Robert Granieri and employees Bryce Pratt and Michael Huang. The complaint alleges Jane Street used nonpublic information obtained from Terraform insiders to trade, earn illicit profits and accelerate the collapse of the Terraform ecosystem. Snyder is seeking damages from the named defendants. The case centers on alleged insider trading and its role in Terraform’s liquidation; no specific dollar damages were reported in the report. Key names: Terraform Labs, Do Kwon, Todd Snyder, Jane Street, Robert Granieri, Bryce Pratt, Michael Huang. Primary keywords: Terraform, Jane Street, insider trading. Secondary/semantic keywords: liquidation, bankruptcy, market maker, illegal profit, ecosystem collapse.
Bearish
A lawsuit alleging insider trading by a major market maker in connection with the liquidation of Terraform Labs is likely to increase regulatory scrutiny and investor uncertainty. Jane Street is a prominent liquidity provider; accusations that it used nonpublic information to trade could reduce trust in professional market makers, widen spreads and temporarily reduce liquidity in related crypto markets. The news directly ties to Terraform — a high‑profile collapse — and may revive concerns about contagion and counterparty risk among traders, prompting risk‑off positioning and selling pressure in the short term. Historically, litigation and regulatory probes (for example, lawsuits around Mt. Gox, Alameda/FTX fallout) have correlated with increased volatility and downward pressure on affected tokens and broader market sentiment. Long term, if the suit leads to fines, settlements or clearer enforcement, it could improve market integrity but also raise compliance costs for firms, potentially reducing liquidity provision. Therefore the immediate impact is bearish (higher volatility, lower liquidity), while long‑term effects depend on enforcement outcomes and market adaptation.