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The updated lawsuit claims Jane Street used non-public information to trade and short TerraUSD (UST) before the stablecoin de-pegged.
 A private Telegram backchannel allegedly served as the pipeline to pass internal liquidity updates from Terraform Labs to Jane Street.
Jane Street allegedly dumped $192 million worth of UST near its $1 peg and opened short positions, securing $134 million in profits.

The bankruptcy administrator for Terraform Labs expanded lawsuit against trading giant Jane Street, alleging the firm used a private Telegram channel named Bryce’s Secret to execute a $134 million inside trading scheme during the historic May 2022 UST collapse.
The Private Backchannel and Token Liquidations
The bankruptcy administrator for Terraform Labs has filed an expanded lawsuit in a Manhattan federal court against institutional trading firm Jane Street. The updated legal documents focus on a private Telegram group named Bryce’s Secret. According to the estate’s claims, a former Terraform Labs employee utilized this backchannel to pass non-public information regarding the stablecoin’s liquidity defense plans to traders at Jane Street, allowing the firm to front run market movements.
Jane Street UST Sales on May 7, 2022
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The Timing of Massive Market Dumps and Short Positions
The lawsuit outlines specific transaction timelines to back up the insider trading claims. For full context, the legal action was initiated in February 2026 in the Southern District of New York, naming Jane Street Group alongside co-founder Robert Granieri, Bryce Pratt, and Michael Huang as defendants. Following the release of unsealed documents in May 2026, the specific trading volumes and profit margins became public knowledge.
Exploiting Curve Pool Withdrawals
According to court records, on May 7, 2022, Terraform Labs quietly withdrew 150 million UST from a Curve liquidity pool as part of an internal rebalancing strategy. The lawsuit alleges that a digital wallet tied directly to Jane Street began dumping 85 million UST onto the market just nine minutes later. This rapid liquidation heavily increased selling pressure on the stablecoin, accelerating its departure from the mandatory $1.00 peg.
Jane Street UST Withdraws from Anchor on May 7, 2022
Capitalizing on Ecosystem Collapse
By utilizing the information from the private Telegram group, Jane Street managed to sell approximately $192 million worth of UST while the token was still valued close to $1.00. As the broader $40 billion Terra ecosystem began to fall apart, the firm opened heavy short positions against the asset. These combined trades allowed Jane Street to walk away with an estimated $134 million in profits while retail investors suffered historic losses.
The Defense Strategy and Legal Motions to Dismiss
Jane Street has completely denied all of the accusations made by the bankruptcy estate. In April 2026, the trading firm filed an official motion to dismiss the case, labeling the legal action as a desperate and baseless attempt by Terraform Labs to shift blame onto a third party for a structural collapse that Terraform Labs caused itself.
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