The cryptocurrency market continues to feel the effects of the collapse of Terraform Labs. The former location of this company is the now-destroyed site where legal actions will be taken against those responsible for the collapse.
Todd Snyder, who is the liquidation administrator for Terraform Labs, has filed a lawsuit against Jane Street, an investment trading firm. The suit names defendants Robert Granieri, co-founder of Jane Street, and two of the company’s employees – Bryce Pratt and Michael Huang – for allegedly profiting from insider information relating to the failure of the Terra and Luna cryptocurrency entities.
He claims that Jane Street used secret methods to obtain crucial information about its competitors. The complaint states that Bryce Pratt, who previously worked at Terraform Labs, kept communication lines open with company insiders, which included a software engineer and the business development head. Snyder claims that those conversations served as channels for sharing confidential information.
Jane Street denies the charges against it. The company maintains that Terra-Luna collapsed because of what it describes as a multibillion-dollar fraud committed by Terraform’s executive team. The company will contest all allegations against it.
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Terraform Labs and $40 Billion Collapse
Do Kwon and his team at Terraform Labs experienced a complete business collapse in May 2022. The algorithmic stablecoin TerraUSD Lost Its Peg to the US dollar. The cryptocurrency Luna experienced a similar loss of value. The market experienced a sudden decline, resulting in a total market value of over $40 billion disappearing within a few days. The initial cryptocurrency market shockwave affected both crypto lenders and hedge funds. The subsequent bankruptcies were a result of this situation.
In 2024, Terraform Labs also opted to declare bankruptcy after reaching a deal where they were fined $4.47 billion by the U.S. SEC. In December, through a plea deal, Jury was sentenced to 15 years in jail in the U.S. on criminal charges.
The lawsuit establishes a crucial timestamp. On May 7, 2022, Terraform withdrew 150 million TerraUSD from Curve’s 3pool without public notice. The wallet allegedly connected to Jane Street executed a transaction that removed 85 million within ten minutes. Snyder argues that his evidence proves the accused parties already knew about their planned actions.
Terraform Labs, Jane Street, and Expanding Claims
Snyder has launched his second strike against Jump Trading through his December lawsuit, which he filed against the company and its executives while demanding a $4 billion damage settlement. He claims Jump made secret agreements that helped TerraUSD before the digital asset experienced its downfall.
The new complaint alleges that some non-public information flowed through Jump to Jane Street. On May 9, as TerraUSD wobbled, Pratt reportedly messaged Kwon and Jane Street traders about bidding on Luna or bitcoin. Kwon responded that Jump’s co-founder should have contacted him about their upcoming fundraising.
The lawsuits seek to retrieve money that belongs to creditors. The lawsuits bring back painful memories from one of the most terrible times in cryptocurrency history.
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