The court-appointed administrator overseeing the bankruptcy of Terraform Labs has sued trading firm Jane Street, alleging insider trading that exacerbated the collapse of the Terra ecosystem. Jane Street denies the claims, calling them baseless and opportunistic. Terraform collapsed in 2022 after losing its peg to the US dollar, leading to a $40 billion wipeout.

The lawsuit alleges that Jane Street sold off millions of dollars in exposure just before the Terra ecosystem collapsed in May 2022. Jane Street reportedly gained inside information from Terraform insiders, allowing them to profit from the collapse. The lawsuit also claims that Jane Street continued to use sensitive information to inform trades even as the stablecoin was collapsing.

Todd Snyder, the court-appointed administrator, is seeking damages from Jane Street, along with disgorgement and interest, in a jury trial. The lawsuit alleges that insider trading worsened the collapse of the Terra ecosystem, leading to significant losses for Terra and Luna holders. Terraform Labs filed for bankruptcy in 2024, and its co-founder, Do Kwon, was sentenced to 15 years in prison.

Read more at Coin Telegraph: Terraform Accuses Jane Street of Insider Trading