For years - literally - we have been pounding the table andpointing outmarket rigging and manipulationirregularities in the crypto markets which, for reasons of our own, we attributed to one of the world's foremost HFT shops and most profitable "market makers" in the world (if not India),Jane Street. Below is an example from 2023, and here arehundreds of others...
Jane Street is going to frontrun so many bitcoin ETF orders, SBF would have made trillionaire if he had only stayed there. And it would have been all legal...
As it turns out someone noticed.
Jane Street was sued for alleged insider trading by the administrator winding up the affairs of Terraform Labs,the firm whose $40 billion collapse in 2022 roiled the crypto markets, contributed to the collapse of FTX and sparked a brutal crypto winter which culminated with the bankruptcy and prison sentence of Sam Bankman Fried.. who just happens to be a former Jane Street employee (along with his polycule partner Caroline Ellison) and the man many claim devised some of the most intricate crypto manipulation schemes operating to this day.
Jane Street used "non-public information to front-run trading that hastened the collapse of Terraform," Todd Snyder, a bankruptcy court-appointed administrator and co-head of the Piper Sander Restructuring group, claimed in a redacted complaint filed Monday in Manhattan federal court. Illegally using this information allowed Jane Street“to unwind hundreds of millions of dollars in potential exposure at precisely the right time, mere hours before the Terraform ecosystem collapsed.”
For those lucky enough not to remember, Terraform imploded when its stablecoin TerraUSD lost its peg to the US dollar, leading to the collapse of its sister token, Luna. The failure set off a chain reaction across the crypto industry, ultimately sending bitcoin plunging below $20,000. Terraform co-founder, Do Kwon, who was recently sentenced to 15 years in prison, deceived investors about the stability of TerraUSD, which was said to be algorithmically “pegged” to the US dollar. Kwon pleaded guilty to fraud and was sentenced in December to 15 years in prison by a New York judge who called his crime “a fraud of epic generational scale.”
Terraform filed for bankruptcy in January 2024 and a wind down trust was formally established later that year.
Snyder was tapped to administer a trust to maximize the recovery for Terraform’s investors and creditors and to close out its operations. As part of his work, Snyder made a stark realization, one which we were aware of all along:"Jane Street abused market relationships to rig the market in its favor during one of the most consequential events in crypto history.”
“On behalf of injured parties, we will pursue all avenues supported by the facts and the law against those who exploited their position and reaped substantial profits at the expense of Terraform Labs’ creditors,” Snyder said and is nowseeking damages from Jane Street, its co-founder Robert Granieri, and employees Bryce Pratt and Michael Huang.
Here are some of the shocking details that the lawsuit revealed:
Source: ZeroHedge News
