TechFlow News, February 25: According to CoinDesk, Todd Snyder, the bankruptcy trustee for Terraform Labs, has filed a lawsuit against high-frequency trading firm Jane Street, accusing it of front-running trades using material nonpublic information—thereby accelerating the 2022 collapse of TerraUSD (UST) and LUNA. The complaint states that just 10 minutes after Terraform Labs quietly withdrew $150 million worth of UST from Curve’s 3pool, a wallet linked to Jane Street withdrew $85 million worth of UST from the same pool—triggering the stablecoin’s de-pegging and ultimately causing $40 billion in market value to evaporate. Jane Street has denied the allegations, calling them “baseless.”
Terraform Labs filed for bankruptcy in January 2024; its founder, Do Kwon, has been sentenced to 15 years in prison after pleading guilty.
