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Terraform Estate Sues Jane Street Over Trades Tied to 2022 Crypto Collapse

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The Terraform Labs bankruptcy estate has sued quantitative trading giant Jane Street, alleging the firm used non-public information to profit as the TerraUSD stablecoin collapsed in May 2022, according to a docket filed yesterday with the New York Southern District Court.

In a report about the lawsuit by the Wall Street Journal, Terraform Labs’ court-appointed administrator, Todd Snyder, stated that Jane Street “abused market relationships” to short the ecosystem during its death spiral, mirroring similar allegations made against Jump Trading late last year.

The estate seeks to recover funds for creditors who lost billions during the $40 billion wipeout of the Terra ecosystem.

Key Takeaways

  • The lawsuit alleges Jane Street exploited private liquidity data to profit from the TerraUSD depeg before the public was aware.
  • Terraform’s estate claims the trading firm netted millions by front-running a critical $150 million liquidity withdrawal from Curve.
  • Jane Street has dismissed the suit as a “desperate” attempt to extract money from legitimate market activities.

Estate Targets “Privileged Access” in Crash Recovery

The lawsuit centers on specific maneuvers executed in May 2022, just as the algorithmic stablecoin UST began to lose its peg to the US dollar.

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Terraform Labs’ court-appointed plan administrator, Todd Snyder, alleges that Jane Street capitalized on vulnerabilities in Terra’s mint-and-burn mechanism via manipulative trades.

“Jane Street abused market relationships to rig the market in its favor during one of the most consequential events in crypto history,” Snyder claimed in his statement to WSJ.

The estate argues that these trades were not merely shrewd market moves but were predicated on non-public information regarding Terraform’s internal liquidity management.

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The legal action is part of a broader recovery effort following the firm’s Chapter 11 bankruptcy filing, which listed assets and liabilities between $100 million and $500 million, a fraction of the market value destroyed during the collapse.

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Inside the Curve Pool Incident

The complaint reportedly highlights a pivotal sequence of events involving the Curve3pool, a critical liquidity venue for stablecoins.

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According to the filing, Terraform Labs executed an unannounced withdrawal of $150 million from the pool to adjust liquidity. Less than 10 minutes later, a wallet allegedly linked to Jane Street withdrew $85 million.

The estate argues this timing indicates Jane Street possessed “advance insight” into Terraform’s operations, using that data to position itself ahead of the resulting market panic.

This mirrors the scrutiny placed on liquidity shifts in current markets, where traders obsessively monitor order books and Polymarket odds for a Bitcoin price drop to detect institutional positioning before price action hits.

Jane Street firmly denies the allegations.

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Implications for DeFi and Stablecoin Regulation

If the court finds merit in the “misappropriation theory” applied to DeFi protocols, it could redefine the legal obligations of market makers in the crypto sector.

The suit suggests that “privileged access” in decentralized finance is a legal liability, not just a competitive edge.

This legal battle arrives as the regulatory environment for stablecoins intensifies. While the 2022 collapse serves as a cautionary tale, modern stablecoins drive $1 trillion in T-bill demand, creating a different set of systemic risks and incentives.

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Regulators are currently scrutinizing how private trading firms interact with issuer protocols.

The outcome could also accelerate legislative frameworks. As odds spike for stablecoin talks regarding the Clarity Act, lawmakers may cite these allegations to demand stricter separation between protocol issuers and market makers.

What Comes Next

The case now moves to the discovery phase in Delaware, where Jane Street will be required to produce communications regarding its 2022 trading strategies.

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This follows a similar $4 billion lawsuit filed by Terraform Labs against Jump Trading in December, which accused the firm of materially contributing to the Terra ecosystem’s instability.

It looks like Terraform is entering a protracted battle on at least two different fronts that could peel back the curtain on high-frequency trading strategies during crypto market crises.

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The post Terraform Estate Sues Jane Street Over Trades Tied to 2022 Crypto Collapse appeared first on Cryptonews.

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BTC rally faces key hurdle with Wednesday Fed meeting, inflation data

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BTC rally faces key hurdle with Wednesday Fed meeting, inflation data

The crypto rally is took a pause on Tuesday ahead of Wednesday’s Federal Reserve decision.

After briefly topping $76,000 overnight, bitcoin pulled back to around $74,000 during the U.S. session, modestly higher over the past 24 hours.

Crypto stocks mostly booked modest gains, with stablecoin issuer Circle (CRCL), bitcoin miner Bitdeer (BTDR) standing out advancing 5% and 12%, respectively. The Nasdaq closed with a 0.5% gain and the S&P 500 rose 0.25%.

It’s almost universally expected that the Fed will leave benchmark interest rates unchanged at 3.50%-3.75% tomorrow. But given rapidly rising oil prices and their possible effect on inflation thanks to the war in Iran, the focus shifts to Jerome Powell’s messaging and policymakers’ outlook for future rates.

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Bitfinex analysts said the key question is whether policymakers still signal rate cuts in 2026 or are moving towards the idea of no further monetary ease. A more hawkish outcome could weigh on risk assets by strengthening the dollar, they said.

Powell’s take on the recent oil advance will also be in focus. Treating it as a temporary shock would support sentiment, while a more stagflationary view could limit the Fed’s flexibility.

Also coming on Wedesday is the February Producer Price Index report. Tyically not having nearly the weight of the Consumer Price Index, the PPI will be a bit more closely followed given its timing ahead of the Fed meeting.

“A hot PPI number followed by a hawkish FOMC would be the most damaging combination for equities and risk assets,” the Bitfinex team continued.

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That backdrop is already showing up in market expectations toward a higher-for-longer rate path, according to Vetle Lunde, head of research at K33.

The probability of rates staying unchanged through the July meeting has jumped to over 60% from 22% last month, with potential cuts now pushed further into late 2026, he said in a Tuesday note.

For now, price action will likely remain muted. “We expect the $74,000–$76,000 region to cap price momentarily,” Bitfinex analysts concluded.

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Next Pepe Coin: Why Investors Are Choosing Pepeto Over AlphaPepe and Other Presales as Exchange Listings Approach

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Pepeto is emerging as the strongest point of interest among presale buyers in 2026 as investors become more selective about where they place capital. In a market still full of empty promises and roadmap heavy launches, Pepeto is gaining traction by offering something most meme coins cannot: three real products close to launch, the PEPE cofounder, and $8.1 million in presale funding according to CoinDesk.

That distinction is becoming increasingly important. Early stage crypto buyers are paying closer attention to whether a project has real infrastructure, verified audits, and a team with a track record. On that basis, Pepeto is starting to stand apart from every other presale in the market, including projects like AlphaPepe according to Cointelegraph.

Why Pepeto is resonating more strongly with investors

1. Pepeto

A major part of Pepeto’s appeal is that it does not ask buyers to trust a team with no track record. The PEPE cofounder who built PEPE Coin is behind this project, which gives participants real confidence in what they are buying. The difference may sound minor at first, but it changes the entire investment case. Instead of putting money into a meme coin with nothing behind it, buyers get three real products approaching launch and a SolidProof audited contract.

That makes Pepeto feel more like a real investment and less like a gamble, even though it still sits firmly in the high upside segment of the market where the next Dogecoin will come from. Investors are also responding to the fact that Pepeto has built 196% APY staking directly into the presale phase, compressing supply every single day.

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Rather than limiting the experience to buying and waiting, Pepeto has created an ecosystem where PepetoSwap, Pepeto Bridge, and Pepeto Exchange will keep holders engaged long after listings begin.

That makes the ecosystem easier to believe in and gives the presale more momentum than a typical meme coin launch. One reason Pepeto is drawing more attention than competing presales is that $8.1 million raised and three products close to launch present it as an active ecosystem, not a static fundraise.

The broader structure, including PepetoSwap, Pepeto Bridge, Pepeto Exchange, and 196% APY staking, gives buyers the impression that this token is attached to a growing ecosystem instead of a one dimensional meme coin pump.

2. AlphaPepe

AlphaPepe offers instant token delivery and a participation model that keeps buyers engaged after the initial purchase. The project includes features like reward claims and rank progression that give the presale more activity than a typical token sale page.

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For investors who want immediate visibility over their position, AlphaPepe delivers on that front. But AlphaPepe does not have the infrastructure depth that Pepeto brings with three announced products, a SolidProof audit, and the PEPE cofounder behind the entire build.

3. Kaspa

Kaspa holds at $0.035 as of March 17 with a loyal community and consistent on chain transaction volumes that reflect real usage. But analysts project a potential dip toward $0.027 by mid April before any meaningful recovery comes through.

The fully diluted valuation already bakes in significant adoption, and the returns from here are measured in modest single or low double digit percentages. For investors looking for the next Shiba Inu level entry, Pepeto at six zeros offers a fundamentally different opportunity category with far more upside potential.

Do not be the person who watches from the sidelines

Pepeto is gaining an edge over every other presale because it offers something no other meme coin has: three real products, the PEPE cofounder, and $8.1 million in proof that investors believe in it. The people who hesitated on DOGE at fractions of a penny and SHIB before it exploded know exactly what it feels like to miss a life changing entry.

That regret is what drives smart investors to act early on projects like Pepeto. They can see the $8.1 million raised, the three products approaching launch, and the SolidProof audit, and they know this is the kind of setup that creates the next wave of crypto millionaires.

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Do not be the person who watches Pepeto list on exchanges and realizes they should have bought when it was still at six zeros. Visit the Pepeto official website and enter the presale today.

Click To Visit Pepeto Website To Enter The Presale

FAQs

Why are investors choosing Pepeto over other presales?

Three products close to launch, the PEPE cofounder, SolidProof audit, and $8.1M raised set it apart.

What makes Pepeto the next Pepe coin?

The same cofounder who built PEPE Coin is behind Pepeto, with real infrastructure this time.

Could Pepeto have stronger upside than rival presales?

At $0.000000186 with three products approaching launch, Pepeto has the steepest trajectory in the presale market.

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The post Next Pepe Coin: Why Investors Are Choosing Pepeto Over AlphaPepe and Other Presales as Exchange Listings Approach appeared first on Blockonomi.

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Arizona AG Files Charges against Kalshi over ‘Illegal Gambling‘

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Law, Arizona, Court, Crimes, Kalshi, Prediction Markets

Arizona Attorney General Kris Mayes announced that her office filed gambling and related criminal charges against the companies behind prediction markets platform Kalshi.

In a Tuesday notice, Mayes said that the charges alleged that Kalshi operated an “illegal gambling business in Arizona without a license” and offered election wagering, in violation of state laws. Arizona authorities alleged that Kalshi’s prediction markets platform allowed state residents to bet on event contracts related to sports and state and federal elections. 

“Kalshi may brand itself as a ‘prediction market,’ but what it’s actually doing is running an illegal gambling operation and taking bets on Arizona elections, both of which violate Arizona law,” said Mayes. “No company gets to decide for itself which laws to follow.”

Law, Arizona, Court, Crimes, Kalshi, Prediction Markets
Source: Arizona Attorney General’s Office

According to the AG’s office, the charges followed Kalshi filing its own lawsuit against Arizona “preemptively in an attempt to avoid accountability under Arizona law.” State authorities have filed similar lawsuits against the companies of prediction market platforms like Polymarket and Kalshi.

Related: Kalshi suffers court loss in Ohio over sports betting lawsuit

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“Sadly, a state can file criminal charges on paper-thin arguments,” a Kalshi spokesperson told Cointelegraph. “States like Arizona want to individually regulate a nationwide financial exchange, and are trying every trick in the book to do it. As other courts have recognized and the CFTC affirms, Kalshi is subject to federal jurisdiction. It’s different from what sportsbooks and casinos offer their customers, and it should not be overseen by a patchwork of inconsistent state laws.”

Last week, an Ohio judge denied Kalshi’s request for a preliminary injunction in a similar case against state authorities, saying that the company had failed to show that the sports event contracts available on the platform were subject to the “exclusive jurisdiction” of the Commodity Futures Trading Commission (CFTC). However, in February, a federal judge in Tennessee blocked state authorities from enforcing gambling laws against Kalshi.

CFTC chair backs “exclusive authority” over prediction markets

Now the sole commissioner on the CFTC since acting chair Caroline Pham stepped down in December, Chair Michael Selig has publicly said that the federal regulator would defend prediction market platforms from state-level lawsuits.

Last week, Selig opened a proposed rule up to public comment on how the Commodity Exchange Act would apply to prediction markets, potentially changing how the agency approaches regulation and enforcement in the future.

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