Firm Accused of Bitcoin ‘10AM Manipulation’ Boosts MSTR Holdings Before Terra Court Battle

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The collapse of the Terra-Luna ecosystem is back in the news and this time, one of Wall Street’s biggest trading firms is at the center of the fight.

According to a report by The Wall Street Journal, the court-appointed liquidator for Terraform Labs has filed a lawsuit in New York federal court against trading giant Jane Street. The firm is accused of using insider information during the 2022 Terra meltdown to profit while the market was unraveling.

Todd Snyder, who is overseeing Terraform’s liquidation process, claims Jane Street had access to non-public information and used it to front-run key trades during the collapse of TerraUSD (UST). The lawsuit argues that this gave the firm an unfair advantage and allowed it to profit while ordinary investors and creditors suffered heavy losses.

The Curve Pool Withdrawal Claim

One of the main allegations centers on events from May 7, 2022. The complaint states that Terraform quietly withdrew 150 million UST from the Curve 3pool. Within minutes, wallets allegedly linked to Jane Street pulled another 85 million UST from the same liquidity pool.

Snyder argues this information was not public at the time and suggests Jane Street acted with advance knowledge of Terraform’s move. The lawsuit describes the activity as an effort to “rig the market” during one of crypto’s most dramatic crashes.

Jane Street has denied any wrongdoing. The firm reportedly maintains that Terra’s collapse was the result of mismanagement and fraud by Terraform’s own leadership, not insider trading.

Communication Channels Under Scrutiny

The complaint also claims that a former Terraform employee who later joined Jane Street maintained contact with Terraform insiders. The lawsuit suggests that sensitive internal discussions may have been shared through private communication channels.

Jump Trading, another major trading firm, is also mentioned. Snyder has previously sued Jump, alleging it had secret agreements to help support UST before its collapse.

Terra’s Fall and the Aftermath

Terraform, founded by Do Kwon, collapsed in May 2022 after UST lost its dollar peg. The crash wiped out more than $40 billion in market value and triggered widespread losses across the crypto industry. Terraform later filed for bankruptcy, and Kwon was sentenced to prison in the United States.

Rising Bitcoin Exposure Raises Eyebrows

Adding to the controversy, Jane Street has sharply increased its exposure to Bitcoin through MicroStrategy shares. The firm reportedly boosted its MSTR holdings by 473% in a single quarter, now holding over 951,000 shares valued at about $124 million.

The timing has drawn attention in crypto circles, especially as some online commentators have previously accused large institutions of influencing Bitcoin price moves around key trading hours.