Why Jane Street Keeps Appearing in Crypto’s Biggest Collapses

Terraform Labs’ bankruptcy estate has sued Jane Street, alleging insider trading tied to the collapse of TerraUSD (UST) and LUNA. The complaint says Jane Street used non-public information about Terraform’s liquidity withdrawals to exit positions and profit before the stablecoin lost its dollar peg.

Jane Street denies the claims, and no court has ruled. The lawsuit states Terraform quietly removed about $150 million of liquidity from Curve pools that supported UST, and that wallets linked to Jane Street shortly afterward withdrew or sold tens of millions of dollars worth of UST.

Terraform argues these actions accelerated the loss of confidence that triggered a broader collapse, wiping out about $40 billion in value. These remain allegations; Jane Street says it will defend itself in court. Jane Street’s name has also surfaced in connection with other major failures, including FTX, but the firm has not been accused of wrongdoing in that case.

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