Terraform Labs administrator Todd Snyder has alleged in an amended complaint filed Monday that Jane Street traders used a private chat to obtain insider information from Terraform employees, before dumping the firm’s entire $192 million TerraUSD position hours before the stablecoin’s collapse.
The filing alleges Jane Street's traders created a “secret message chain” involving current and former employees of Terraform, named “Bryce’s Secret” after Pratt, a former Terraform intern who later joined Jane Street as a systems developer.
According to the latest complaint, the chat was created on February 22, 2022, between Pratt and two former Terraform colleagues, including Terraform's Head of Business Development.
One participant told Pratt in the chat, "bro we all know who the buyer is. its where u work," before naming "Jane Streeeeeeeet,” as per the filing.
The document alleges Pratt continued tapping his Terraform contacts for "defi info" that Jane Street was "very hungry for," often sending requests via Telegram with the instruction "don't share pls."
On May 7, 2022, Jane Street unstaked and sold its entire 192 million UST position in a single day, all effectively at the dollar peg, just hours before the stablecoin began its collapse, according to the complaint.
The filing alleges Jane Street later shorted UST and Luna after learning details of a confidential rescue effort, ultimately making more than $134 million across the trades.
“This suit is a transparent attempt to extract money when it is well-established that the losses suffered by Terra and Luna holders were the result of a multi-billion dollar fraud perpetrated by the management of Terraform Labs," a Jane Street spokesperson told Decrypt. They added that, "As demonstrated in the motion to dismiss filed in court last month, we will defend ourselves vigorously against these baseless, opportunistic claims."
Decrypt has reached out to the Terraform Labs wind-down trust for comment.
Still, he noted crypto has one major advantage over traditional finance: “transparent on-chain data.”
“That level of visibility can make it much easier for investigators to trace flows of funds, trading patterns, and wallet activity” in order to prove or disprove allegations, Puckrin added.
The Terra collapse
