Jane Street's insider trading lawsuit involving Terra resurfaces, after being heavily fined by regulators in India

SmartContractAuditor · 2026-02-26T05:41:27+00:00

Quantitative trading firm Jane Street was sued in the New York Federal Court over the Terra ecosystem collapse, accused of using undisclosed information to avoid losses exceeding $200 million. The complaint states that it conducted large transactions before the Terra collapse; Jane Street denies the allegations and calls them "baseless accusations." The case involves multiple charges including insider trading.

SmartContractAuditor

2026-02-26 05:41:27

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Odaily Planet Daily reports that quantitative trading firm Jane Street was recently sued in the Southern District of New York for events related to the Terra ecosystem collapse. The firm is accused of using non-public information to avoid over $200 million in potential losses before the Terra/Luna crash in May 2022. The plaintiff claims to have obtained important non-public information through communication with Terraform Labs’ engineering and business teams and made large trades prior to the UST liquidity migration. Jane Street denies the allegations, calling the lawsuit “baseless accusations.”

The complaint reveals that on May 7, 2022, after Terraform withdrew 150 million UST from Curve3pool, the related address quickly withdrew 85 million UST from the same pool, causing liquidity imbalance. The Terra ecosystem then collapsed within a week, with a market cap loss of about $40 billion.

The report notes that Jane Street was previously issued a 105-page enforcement document by the Indian Securities and Exchange Board, accusing it of exploiting structural advantages in the local market to gain abnormal profits. The current case involves 13 charges including insider trading, securities fraud, and violations of commodity trading laws, with some details still sealed. (Forbes)

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