Terraform's liquidator accuses Jane Street of insider trading by selling UST in advance and shorting it through a private Telegram group

According to CoinDesk, newly unsealed court documents show that Wall Street quantitative trading giant Jane Street is accused of obtaining insider non-public information from Terraform Labs through a private Telegram group called "Bryce's Secret" before the collapse of Terra in 2022, and preemptively selling approximately $192 million UST while establishing short positions, profiting about $134 million during the collapse of the Terra ecosystem, which was around $40 billion.

The lawsuit claims that Jane Street sold approximately $85 million UST on Curve just 9 minutes after Terraform withdrew $150 million liquidity from the Curve pool on May 7, 2022, with the related wallet subsequently suspected of being a significant address that contributed to the UST depegging.

Jane Street denies the allegations, stating that the lawsuit is "baseless" and that it will actively defend itself. The lawsuit also names co-founder Robert Granieri and trader Michael Huang, accusing them of violating federal securities laws and the Commodity Exchange Act.