Lawsuit Claims Jane Street Used Insider Tips to Accelerate Terra’s $40B UST Collapse

A federal complaint filed Feb 23, 2026 (S.D.N.Y., No. 1:26-cv-1504) alleges quantitative trading firm Jane Street used confidential contacts at Terraform Labs to profit from and accelerate the May 8, 2022 UST depeg and LUNA hyperinflation that wiped roughly $40 billion from markets. Plaintiffs say Terraform withdrew about 150 million UST from Curve’s 3pool to defend the peg, and minutes later wallets linked to Jane Street sold about 85 million UST — the largest single sale in that pool’s history — effectively front-running the liquidity move. The suit names Jane Street employees Bryce Pratt and Michael Huang and co‑founder Robert Granieri, accusing Pratt (a former Terraform placement) of using private relationships and chat groups to obtain nonpublic details. It also alleges discussions between Jane Street contacts and Terraform founder Do Kwon about $200–$500M bailout deals in discounted LUNA or BTC and cites prior related litigation involving Jump Trading. Plaintiffs seek disgorgement, damages and a jury trial; Jane Street denies wrongdoing and calls the claims baseless. The case is in early stages with no rulings. For traders: the lawsuit may renew regulatory and litigation scrutiny of market makers and centralized counterparties, revive negative sentiment around algorithmic stablecoins and raise attention on on‑chain withdrawal timing and correlated wallet activity. Key keywords: Jane Street, Terraform Labs, insider trading, UST, LUNA, Curve 3pool, Jump Trading.