<\/p>\n
Terraform Labs is suing quantitative trading firm Jane Street for its role in the collapse of the Terra ecosystem.<\/p>\n
Terraform Labs\u2019 estate has filed a lawsuit against quantitative trading firm Jane Street<\/a>, alleging that the firm abused insider knowledge to profit from Terra and that it inadvertently contributed to the downfall of the ecosystem<\/a>.<\/p>\n \u201cIn this case, however, Jane Street Capital and its traders exploited the public\u2019s participation in crypto markets and contributed to the collapse of Terraform\u2019s cryptocurrency ecosystem. They did so by misappropriating confidential information and manipulating market prices,\u201d the suit reads.<\/p>\n The filing is heavily redacted, but focuses on a move related to the UST Curve 3pool. Per Snyder, Terraform withdrew $150 million of UST from the pool, a move that \u201cwas not publicly announced,\u201d to deploy it to 4pool in the coming week.<\/p>\n Nine minutes later, Jane Street allegedly made its \u201cfirst and only sale of UST in that pool,\u201d selling $85 million of UST in a single transaction.<\/p>\n Snyder says that the swap directly led to a steep selloff in UST that resulted in Terra\u2019s subsequent death spiral, and accuses Jane Street of using its connections with Terraform Labs to \u201cmaximize its own profits and avoid losses suffered by other investors who did not have this confidential information.\u201d<\/p>\n Following the UST depeg, LUNA, now LUNC, plummeted from a $29 billion market capitalization to nearly zero in a matter of days, after reaching as high as $41 billion<\/a> in April 2022.<\/p>\n