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Jane Street Hit with Terra $40B Insider Trading Suit
- sam0x17 7mo agoAnd oddly, suddenly the daily 10 AM Jane Street BTC sells stop and suddenly crypto is able to rally...
- irjustin 7mo agoProbably coincidence - general market is up strongly too. Or, too hard to tell anyway.
- fn-mote 7mo agoYou have to connect this to the market or the article. I certainly don’t believe Jane Street is keeping crypto down somehow. What kind of non-conspiracy theory are you proposing?
- furryrain 7mo agoThe article links to https://x.com/InvestWithD/status/2026381475776692426 https://x.com/InvestWithD/status/2026381475776692426 which purportedly quotes a Jane Street insider that after pausing BTC activity, they expect BTC will go up. I personally don't understand how any of this works.
- johnnycakes 7mo agoThe tweet used as the source is a troll. That guy uses the "I just got off the phone with..." template all the time to joke/troll about things going on in markets.
- furryrain 7mo agoAh, what a world.
- wmf 7mo agoI suspect this theory is cope from people who missed the top.
- pawelduda 7mo agoI bet that's the case. Crypto bros need a villain to justify being trigger-happy top buyers flooded by greed every time. Jane Street is particularly useful to KoLs who have been shilling crypto all the way down from the top. There is already strong confirmation bias from everyone yapping "See? You lost moniez because of market manipulation! I'm a successful trader (here is my paid substack and exchange reflink)"
- Infernal 7mo agoIs there an article about this written by a human? The “it’s not X. It’s Y” is too distracting.
- consumer451 7mo agoWaiting for the only human I trust in this space to report on this: https://www.web3isgoinggreat.com/ https://www.web3isgoinggreat.com/
- ChrisMarshallNY 7mo ago+1 on that. Thanks! I'm sure she'll be right on it...
- consumer451 7mo agoShe's far braver than most of us. I self-censor all the time on this website. Havel's greengrocer, placing the sign. Carney at Davos, his eyes uncovered.
- bdelmas 7mo agoYou could also check Matt Levine from Money Stuff - Bloomberg. He is quite known on HN. The way he writes plus his great knowledge with no BS makes him my favorite (and only) journalist I follow. Edit: actually someone already found his article and posted it: https://news.ycombinator.com/item?id=47160848 https://news.ycombinator.com/item?id=47160848
- consumer451 7mo agoThanks, but the link to the journalist I shared has been threatened multiple times, and yet she kept trucking through. I rarely say "avoid MSM," but in this case, in 2026, I would personally recommend avoiding your MSM recommendation. No hard feelings.
- jlund-molfese 7mo agohttps://www.wsj.com/finance/currencies/jane-street-accused-of-insider-trading-that-helped-collapse-terraform-659e6993 https://www.wsj.com/finance/currencies/jane-street-accused-o... is a pretty normal one
- readams 7mo agoAs always, Matt Levine has the best take on this: https://www.bloomberg.com/opinion/newsletters/2026-02-24/ai-can-manage-your-mutual-fund https://www.bloomberg.com/opinion/newsletters/2026-02-24/ai-... "I am sorry. But if you go to Jump Trading and Jane Street and say “hello, I have an unregulated poorly designed mechanism that could lead to $50 billion of market value collapsing overnight, would you like to trade with me,” they are going to say yes, but their eyes are going to light up, you know? If at Time 0 you give them an extremely gameable system that can produce billions of dollars of profit, at Time 10 your system is going to be a smoking wreckage and they are going to have billions of dollars of profit. That’s their whole job, you know? I couldn’t tell you in advance what all the intermediate steps will be, and in fact in hindsight I cannot tell you what the intermediate steps actually were, how Jump and Jane Street made money off the collapse of Terra. But as a heuristic, I mean, come on. Terra was like “hello we have a balloon full of money, here is a pin, dooooooon’t pop the balloon.” Guess what!"
- yunnpp 7mo agoI don't really follow this space, but is evaporating $50bn not a concern to anybody?
- deleted 7mo ago[deleted]
- SpicyLemonZest 7mo agoThere was never a real $50bn to be evaporated. It's like saying that $1.2tn evaporated in the Bitcoin market drawdown since October - it doesn't mean value has been destroyed, it means the market's estimate of how much value existed was wrong.
- bombcar 7mo agoThe reality is that the $50bn was already gone, the collapse just revealed it. It's like with Madoff; the billions weren't lost when it collapsed, the billions were already gone (or never existed).
- klodolph 7mo ago
- wuiheerfoj 7mo ago10mins is a lifetime in capital and crypto markets - I find it hard to believe that trading 10mins after the Terraform Labs swap hit the chain constitutes insider trading. The claim of artificial price inflation with Jump sounds more questionable but TFA doesn’t seem to put it front and centre
- thrwaway55 7mo agoEspecially since it's a public ledger. Anyone with a program watching the chain is going to see it. From there they can exercise whatever trade they want for their gain.
- jkubicek 7mo agoDoesn’t that 10m lag make it seem more like insider training? An automated trade would happen nearly instantly, 10m is plenty of time for insiders to send some texts or make some calls.
- klodolph 7mo agoThird option, which is that there was a partially automated system with a person in the loop.
- qgin 7mo agoI'm unclear what insider trading means in the context of crypto. Inside what?
- tripplyons 7mo agoIt's a bad headline. They used publicly available blockchain transactions and didn't cause the collapse of the Terra ecosystem. Terra collapsed because it was a Ponzi scheme offering 20% APY on a fake stablecoin. The Terra stablecoin was not backed by real dollars, but instead by a cryptocurrency called Luna that did nothing else other than let you issue Terra stablecoins.
- Powdering7082 7mo agoI mean they are being sued for insider trading, not exactly a bad headline maybe it could say alleged? It seems extremely unlikely to me, a casual observer of the shit show that was Luna/Terra, that the suit would be successful
- tripplyons 7mo agoSaying Jane Street caused a $40 billion loss is wrong. Terra caused the loss because it was a Ponzi scheme that claimed to offer 20% APY on a stablecoin that wasn't backed by any real dollars.
- deleted 7mo ago[deleted]
- int32_64 7mo agoDidn't many of the FTX cronies come from Jane Street? So many of the biggest fraudsters in crypto came from tradfi and their scams were discovered because they picked the one asset class where being unable to process withdrawals implies a 100% chance of fraud. It makes you wonder how much fraud occurs in tradfi but it goes undiscovered because nobody can self-custody their paper metals or paper stocks.
- cindyllm 7mo ago[dead]
- rvz 7mo ago> It makes you wonder how much fraud occurs in tradfi but it goes undiscovered because nobody can self-custody their paper metals or paper stocks. Better not mention the FinCEN files either. [0] Where over $100B to $2TN dollars worth of illicit transations from criminals and fraudsters were knowingly allowed by banks and even ponzi schemes were freely allowed as well [1]. [0] https://www.icij.org/investigations/fincen-files/global-banks-defy-u-s-crackdowns-by-serving-oligarchs-criminals-and-terrorists/ https://www.icij.org/investigations/fincen-files/global-bank... [1] https://www.bbc.co.uk/news/uk-54225572 https://www.bbc.co.uk/news/uk-54225572
- mcmcmc 7mo agoJane Street was also banned from trading in India because they couldn’t stop manipulating the market
- bb88 7mo agoWhat do you want? Regulated or unregulated securities? You can't invest in unregulated FTX and then whine when they went and lost all your money -- (not ai emdash) because it was -- wait for it -- UNREGULATED!
- StopDisinfo910 7mo agoThat's not how this works. Unregulated markets are not a free for all. Law still apply in the absence of a regulator. Also, unrelated minor pet peeve, but what's the deal with the "not ai emdash"? You can just use dash or comma, you know.
- jsemrau 7mo agoThis is about a crypto transaction leading to the Terra/Luna collapse. If there is one benefit coming from crypto is that it explains clearly why finance is a regulated industry.
- jkubicek 7mo agoThat’s the lesson we should be learning, but I’m worried the lesson we’re actually learning <sees 18yo crypto bro drive by in a Lamborghini> is that regulations hinder innovation.
- klodolph 7mo agoI remember this in the news, but I had to look stuff up on Wikipedia to refresh my memory: https://en.wikipedia.org/wiki/Terra_(blockchain) https://en.wikipedia.org/wiki/Terra_(blockchain) > The Anchor Protocol was a lending and borrowing protocol built on the Terra chain. Investors who deposited UST in the Anchor Protocol were receiving a 19.45% yield paid out from Terra's reserves. What the fuck?
- medi8r 7mo agoA ponzi crypto scheme? It is the only kind.
- Nursie 7mo agoIt was a system built on sleight of hand, with a cover story just complex enough that it worked for a while. How do you create a stablecoin? There are two ways in general. One is to have it backed 1:1 with a bank account somewhere that contains the actual currency it represents. In theory you then allow people to freely exchange back and forth between tokens and dollars. Tether kinda/sort works this way in theory. The other way is to play games with algorithms and try to use the market against itself to create stability. Terra (UST) attempted to do this by running a complex scheme that leveraged a floating backing token, Luna, and a smart contract which allowed you to exchange 1 UST for $1 worth of newly created Luna. If UST starts to lose its peg and become worth less than a dollar, people buy it to exchange for $1 worth of Luna, sell the Luna for a profit, so arbitrage sorts the price out. If it becomes worth more than a dollar, you buy Luna, burn it to convert to new UST, then sell that for a profit, adding sell pressure and diluting the supply. Even with the best will in the world systems like this could best be described as meta-stable, i.e. it'll smooth out minor perturbations but there are limits. One major problem is how do you get Luna to be worth anything though? Well you offer inducements like a ridiculous interest rate, high enough that anyone outside the cryptocurrency bubble would immediately see a red flag, and which then has to be subsidised by ... creating more tokens. Eventually the limit was discovered, Luna dumped massively and the whole illusion collapsed.
- waxie 7mo agoDue to insider commentary: Terraform retained nonpublic information.
- blurbleblurble 7mo agoThis is just obnoxious. Invest in experimental instruments without doing your due diligence and that's on you. If you don't have the humility to reckon with that you definitely don't deserve $40b of other peoples' fake money.
- etc-hosts 7mo agoHow can an incredible pile of fraud successfully sue another company? The only source of news I trust on Terra is https://twitter.com/FatManTerra https://twitter.com/FatManTerra
- MBCook 7mo agoLook I’m happy to play “pin the tail on the finance bros”, and I hate crypto with a passion, but I don’t see evidence here. The company in charge of a crypto thing made a sudden (and I assume unexpected) withdraw of $150 million. Jane Street, who worked with them, dumped $80 million within 10 minutes. Are we supposed to think Jane Street wasn’t supposed to be monitoring what was going on? If I was working with a bunch of crypto people who suddenly took out a ton of money without warning me, I can absolutely see wanting to pull my money before everything collapses. Crypto is volatile. As other people pointed out, this is 10 MINUTES. You don’t need secret information to notice something happening that fast. You need dial-up. That would be plenty fast enough. Sure if you can actually produce records where someone from TerraLabs said “we are running away, pull out quick“ fine. But even then… if they waited most of 10 minutes did they even need that information? It’s not like rug pulls are an unknown thing in crypto. I get the lawyer wants to help his clients but unless he gets some discovery and finds something pretty damning I’m not sure there’s anything here. I was expecting to see one of those allegations where they did it within like two seconds. I can see two seconds being collusion.
- tim333 7mo ago>On May 7, 2022, Terraform Labs withdrew 150 million TerraUSD from the Curve3pool without any public announcement. Within 10 minutes, a wallet allegedly linked to Jane Street withdrew an additional 85 million TerraUSD... I thought the whole idea of crypto is that everything is public on the blockchain. Presumably anyone could have seen the $150m withdrawal and reacted? It doesn't seem very insider information.
- rowanG077 7mo agoI guess the insider information is knowing who the wallet belongs to?
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- tempodox 7mo agoWhat a horribly unreadable article.