Jane Street allegedly tapped a private Telegram channel run by a former Terraform Labs intern to offload $192 million of TerraUSD (USTC) days before the stablecoin broke its dollar peg.
Court Filing Details Telegram Backchannel
The claim sits at the heart of a redacted complaint recently unsealed in a Manhattan federal court, brought by Todd Snyder, the court-appointed administrator winding down Terraform's estate.
Snyder accuses Jane Street of using nonpublic tips funneled through a chat group called "Bryce's Secret."
The group was named for Bryce Pratt, a former Terraform intern who later joined the trading firm as a systems developer.
Filed in February in the Southern District of New York, the suit also names co-founder Robert Granieri and trader Michael Huang.
The complaint zeroes in on May 7, 2022, when Terraform pulled 150 million UST from the Curve 3pool. Within ten minutes, a wallet later linked to Jane Street swapped 85 million UST into the same pool, the filing alleges.
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Bryce's Secret and Insider Tips
Pratt allegedly reconnected with former Terraform colleagues after joining Jane Street in September 2021, then opened the chat to channel updates on liquidity moves, asset strategy, and treasury plans.
Snyder claims Jane Street rode that pipeline to exit its UST stack near par, then pocketed about $134 million by shorting Terra-linked tokens during the collapse.
According to the filing, a crypto analytics firm later told a Jane Street contact the firm had "made a killing," after which traders discussed how to decommission wallets that had been identified.
Jane Street denies the allegations. In an Apr. 23 motion to dismiss, the firm called the case an effort to extract cash to foot the bill for a fraud that Terraform itself perpetrated, pointing to founder Do Kwon's 15-year prison sentence.
LUNC Reaction and Recent Swings
Terra Luna Classic (LUNC) climbed roughly 2% on the news, changing hands near $0.0000768, while USTC rose close to 5% to $0.0063 on a 44% jump in 24-hour volume.
The token's recent path has been choppy. LUNC fell about 37% in May after rallying nearly 250% the prior month, with traders citing community burns, governance upgrades, and waves of speculative volume tied to the v4.0.1 patch.
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