Jane Street accused of selling $192M in UST before Terra collapse

Global quantitative trading and market-making firm Jane Street is facing allegations that it used insider information to sell approximately $192 million worth of UST just before the Terra ecosystem's collapse, CoinDesk reported. According to a lawsuit filed in Manhattan federal court by the Terraform Labs bankruptcy trustee, Jane Street was allegedly aware of Terra's internal situation before the collapse through a private Telegram chatroom named "Bryce's Secret." The lawsuit claims that Bryce Pratt, a Jane Street employee at the time and a former Terraform Labs intern, provided the firm with information from his contacts within the project. Based on this information, Jane Street is said to have sold its entire holding of roughly 193 million UST on May 7, 2022, right before the de-pegging event. The filing specifically notes that Jane Street sold $85 million in UST just nine minutes after Terraform Labs withdrew $150 million in liquidity from a Curve Finance (CRV) pool. The trustee also alleges that Jane Street subsequently profited by approximately $134 million from a short position. In response, Jane Street stated that the losses suffered by Terra and LUNA investors resulted from a multi-billion dollar fraud by Terraform Labs' management, adding that it will "vigorously defend" against what it described as baseless claims.