Jane Street Group LLC has been sued by Terraform's bankruptcy administrator for allegedly using stolen information to withdraw $85 million in TerraUSD just minutes after the company's own withdrawal, potentially accelerating the $40 billion collapse. The complaint, filed in Manhattan federal court, accuses the trading firm of insider trading under the Commodity Exchange Act.

The lawsuit alleges former Terra intern Bryce Pratt created a private communication channel with Terraform's business development lead, providing Jane Street with material non-public information. This relationship dates back to 2018 when Jane Street became Terraform's market-making partner. The firm's trading desks reportedly received urgent memos to cease "manipulative Bitcoin trading activity" after the suit was filed.

Legal experts note insider trading claims in crypto are complex, as courts must determine what constitutes securities and material non-public information in token markets. The lawsuit seeks damages, disgorgement, interest, and a jury trial. Jane Street has called the claims "desperate" and "baseless," blaming Terraform's management for the fraud that led to the collapse.