Jane Street Accused of $192M Insider Trading in Terra Collapse: Telegram Channel Scandal

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Jane Street rejects Terra Telegram insider trading claims

Jane Street denies allegations of insider trading related to a private Telegram channel during the 2022 collapse of Terra.

Summary

  • A Manhattan complaint accuses Jane Street of using a Telegram channel to exit $192 million of TerraUSD before UST lost its dollar peg.
  • The suit names co-founder Robert Granieri and trader Michael Huang alongside a former Terraform intern who allegedly relayed non-public information.
  • Jane Street called the complaint a transparent attempt to extract money and said it will defend vigorously against the claims.

A lawsuit filed in Manhattan claims that Jane Street profited from the collapse of TerraUSD. The firm is accused of using a private Telegram group to sell off $192 million worth of the token before it crashed in May 2022, and reportedly made around $134 million by betting against it as the Terra ecosystem failed.

The lawsuit was brought by the person in charge of closing down Terraform Labs and also targets Robert Granieri, a co-founder of Jane Street, and trader Michael Huang. The suit claims that a former Terraform intern, after joining Jane Street, shared confidential information via a private messaging channel, allowing Jane Street to sell assets before the value of TerraUSD (UST) collapsed.

The Telegram backchannel at the centre of the insider trading complaint

According to reports, on May 7, 2022, Jane Street sold 85 million UST shortly after Terraform Labs removed 150 million from a major Curve Finance pool. This event is part of a larger legal case initiated in February 2026 by Todd Snyder, who was appointed by the court to manage the situation.

A spokesperson stated that the lawsuit is a clear effort to get money from those affected by the collapse of Terra and Luna, despite the widely known fact that the losses stemmed from a massive fraud committed by the leaders of Terraform Labs.

In April 2026, Jane Street asked a New York court to throw out a lawsuit, claiming its trades were based on information available to everyone. They also pointed to a legal principle called the Wagoner rule, which generally prevents a bankrupt company from suing others for losses that resulted from its own actions. The court hasn’t made a decision yet.

Why the case matters for crypto market regulation

This lawsuit builds on a 2023 court decision that identified UST and Luna as securities. This earlier ruling provides stronger support for the argument that Jane Street committed securities fraud.

In February 2026, Terraform’s administrator filed a separate lawsuit against Jane Street regarding claims that they improperly gained an advantage by acting on information before withdrawals from the Curve pool were processed.

Do Kwon, who co-founded Terraform, has admitted to charges of conspiracy and wire fraud and is currently in prison for 15 years. According to Todd Snyder, an administrator involved in the case, trading by Jane Street contributed to Terraform’s downfall by reducing available funds and increasing market fear.

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2026-05-20 22:54