Jane Street Group is facing a lawsuit for allegedly engaging in front-running trades. The complaint, filed by Terraform Labs' bankruptcy plan administrator Todd Snyder in Manhattan federal court, claims Jane Street profited from non-public information provided by Terraform insiders.
These alleged trades are accused of contributing to the rapid collapse of the TerraUSD stablecoin and its sister token, LUNA, in May 2022. This event erased approximately $40 billion in value when TerraUSD lost its dollar peg, and LUNA plummeted to near zero.
The lawsuit also names Jane Street co-founder Robert Granieri and employees Bryce Pratt and Michael Huang. This action follows a separate $4 billion claim against Jump Trading, alleging market manipulation related to TerraUSD.
Manhattan federal prosecutors have previously investigated Telegram chats between staff at Jump Trading, Jane Street, and Alameda Research concerning a proposed TerraUSD rescue. The focus was on whether these communications constituted market manipulation prior to the stablecoin's collapse.
Terraform founder Do Kwon has pleaded guilty to fraud charges and received a 15-year prison sentence.