CRYPTO MECHANIC

In crypto, every big crash creates a villain.
After the 2022 collapse of Terra, many blamed whales, insiders, or flawed design.
Now in 2026, a new lawsuit has brought a familiar name into the spotlight: Jane Street.
Jane Street Sued For Crypto Insider Trading That Accelerated Terraform Collapse and not only that, i have more information to share.

What Actually Happened in 2022?
Back in May 2022, the stablecoin Terraform Labs created — called TerraUSD (UST) — suddenly lost its $1 peg.
Once it slipped, panic started.
People rushed to sell.
Liquidity disappeared.
The system entered a death spiral.
Within days:
UST collapsed
Its sister token Terra (LUNA) went to nearly zero
About $40 billion in value was wiped out
This event triggered the entire crypto winter.
The Lawsuit
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.
According to the lawsuit, the trading firm may have had advance knowledge that Terraform was quietly removing large amounts of liquidity from key trading pools shortly before the system began to weaken. The claim suggests that this information was not public at the time, which, if proven, could amount to insider trading.
The complaint further alleges that shortly after liquidity was withdrawn, a wallet linked to Jane Street sold a massive amount of UST within minutes. This large sell-off may have contributed to the initial loss of the dollar peg, which then triggered panic across the market.

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.
In short

Today, Jane Street is behind more than 10% of all equity trades in North America, and its trading revenue is more than double that of the world’s largest hedge fund. And because Jane Street is a quantitative trading firm and not a hedge fund, it is exempted from detailed disclosure requirements, allowing Jane Street to avoid revealing its trading strategies and financial details.
Bitcoin Newyork session Manipulation
There is also a separate narrative circulating in trading communities that links Jane Street to regularly dumps Bitcoin during U.S. market hours.
This is not something new they have been doing it for years and are more active in recent months.

I’ve mentioned on my profile several times that almost every day, right after the New York open, Bitcoin starts to sell off.

However, market data shows these moves are largely explained by ETF flows, hedging activity, and algorithmic trading patterns rather than any confirmed coordinated manipulation. As of now, there is no verified evidence supporting claims of deliberate daily price suppression.
Regardless of how the case unfolds, it is already being seen as a landmark moment for the industry. It highlights concerns about transparency, access to private information, and the growing influence of large market-making firms within crypto. The outcome could shape future regulations around how institutional trading interacts with decentralized ecosystems.
For now, the situation remains unresolved. What exists today are allegations on one side and strong denials on the other. Courts will ultimately determine whether the firm played a meaningful role in accelerating one of crypto’s biggest collapses.