Terra Collapse: Jane Street Allegedly Leveraged Private Telegram Channel for Advance Intel
Court documents claim Jane Street utilized a confidential Telegram group to liquidate hundreds of millions in exposure just hours ahead of Terra's catastrophic $40 billion implosion.
Recently revealed court documents in the ongoing Terraform Labs bankruptcy proceedings claim that Jane Street leveraged a private Telegram communication channel maintained by Bryce Pratt, a former intern at Terraform, to access confidential information prior to the TerraUSD collapse. Pratt currently holds a position as a systems developer with Jane Street.
The communication channel, which went by the name "Bryce's Secret," purportedly provided the quantitative trading company with direct access to individuals inside Terraform as Jane Street divested its TerraUSD (UST) holdings just before the algorithmic stablecoin's depegging event in May 2022, the court documents indicate. "Jane Street used Bryce's Secret chat group and other backchannel sources of non-public information to front-run trading that hastened the collapse of Terraform," the filing states.
The allegations bring renewed attention to questions about who benefited financially from Terra's $40 billion implosion, representing one of the cryptocurrency sector's most significant catastrophes, and may establish precedent for how conventional insider trading and market manipulation legal frameworks extend to decentralized finance ecosystems.
On Feb. 23, Todd Snyder, Terraform's court-appointed administrator, sued Jane Street, its co-founder Robert Granieri, and employees Bryce Pratt and Michael Huang in Manhattan federal court, accusing them of "misappropriating confidential information and manipulating market prices."
Two months later, Jane Street filed a motion to dismiss the lawsuit, arguing that Terraform attempted to "extract cash from Jane Street to foot the bill for a fraud that Terraform itself perpetrated on the market," Cointelegraph reported on April 23.
A spokesperson for Jane Street told Cointelegraph that the lawsuit was 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."
Curve trade raises new UST concerns
The specific timing surrounding a particular UST transaction has generated additional concerns, pointing toward possible access to privileged information by an unidentified party.
On May 7, 2022, Terraform quietly withdrew about $150 million in UST from the Curve 3pool liquidity pool.
Less than 10 minutes after Terraform's withdrawal, Curve 3pool saw its largest single swap of $85 million, precipitating a steep sell-off in UST, which the filing said "ultimately led to the collapse of the Terra ecosystem."
The heavily redacted filing does not identify the entity behind the swap.
Snyder seeks to recover alleged wrongful gains from Jane Street, plus compensation for additional damages to distribute to Terraform creditors and investors who lost funds in the 2022 collapse.
Jane Street is the world's leading quantitative trading firm by net trading revenue, with $39.6 billion generated in 2025, reported Reuters.
Cointelegraph reached out to Terraform's court-appointed administrator for comment but had not received a response by publication.