The cryptocurrency market crash that evaporated $40 billion, someone knew the outcome 10 minutes in advance Article: Cosmic Wave Naruto, Deep Tide TechFlow, May 2022, $40 billion evaporated within 72 hours. That was the most devastating collapse in the history of cryptocurrency. UST, once known as the "crown of algorithmic stablecoins," fell from $1 to worthless paper within a few days; Luna, once valued at nearly $40 billion, fell from a high of $116 to near zero. Millions of ordinary investors lost their savings in early summer, refreshing their screens and staring at the continuously falling candlestick, unsure of what had happened or what to do. The official explanation came quickly: the algorithm design was flawed, Do Kwon lied, and the market naturally died. Most people accept this answer, classify that catastrophe as' another lesson from the crypto world ', and then continue moving forward. This answer has been maintained for nearly four years. Until February 23, 2026, Todd Snyder, the bankruptcy liquidator of Terraform Labs, submitted a lawsuit to the Manhattan Federal Court. Jane Street, the world's most mysterious and profitable quantitative trading giant, has been pushed into the spotlight. The question that had been silent for four years finally had a new version of the answer. To understand the weight of this accusation in Jane Street's secret group chat with LUNA, one must first know who the defendant is. For most encryption users, Jane Street may be an unfamiliar name. But on Wall Street, it can be called a legend, a deliberately low-key player who quietly became one of the most important players in the global financial market. Between 1999 and 2000, Tim Reynolds, Robert Granieri, and Michael Jenkins, three former Susquehanna traders, along with IBM developer Marc Gerstein, founded Jane Street in a small windowless office in New York. At the beginning, they engaged in ADR arbitrage, which was unremarkable and nobody paid attention to. But they later set their sights on an ETF that was still a niche market at the time and turned it into their core battlefield. This bet changed everything. Today, Jane Street is one of the world's largest market makers, operating simultaneously in 45 countries and over 200 trading venues, holding approximately 24% of the primary market share of US listed ETFs and a monthly equity trading volume of up to $2 trillion. The net trading revenue for the full year of 2024 is $20.5 billion, surpassing Bank of America and on par with Goldman Sachs. In the second quarter of 2025, its single quarter net trading revenue broke the quarterly record of all major investment banks on Wall Street, reaching $10.1 billion and a net profit of $6.9 billion. 3000 employees, no CEO, no traditional hierarchy, all employees are paid according to the company's overall profit distribution. Jane Street describes itself as a "collection of puzzle solvers," while the outside world refers to it as an "anarchist commune," flat, mysterious, and almost completely closed to the media. One well-known figure on its alumni list is SBF, who joined Jane Street after graduating from MIT in 2014 and honed his trading instincts for three years before leaving in 2017 to establish Alameda Research and FTX. The people cultivated by this company have profoundly changed the face of the crypto world, in any sense. Now, this company, known for its low-key, precise, and always on the side of information advantage, has taken the defendant's seat. The core of the accusation comes from a private group chat called 'Bryce's Secret'. The founder is Bryce Pratt, an employee of Jane Street. He used to be an intern at Terraform and entered Jane Street after leaving, but his old network was not broken, and the doors on both sides were open to him. In February 2022, Pratt pulled his old colleagues into this private channel and established an information pipeline connecting Terraform's internal network with Jane Street, with Terraform's software engineers and business development leaders connected on the other end. The lawsuit alleges that it was through this channel that Jane Street learned in advance of Terraform's plan to quietly withdraw from Curve's liquidity pool, a decision that has not yet been made public to any public. At 5:44 pm on May 7th, 10 minutes after Terraform Labs quietly withdrew $150 million worth of UST from Curve 3pool, a wallet accused of being associated with Jane Street followed suit and withdrew $85 million worth of UST, making it the largest single transaction in the history of the pool. On May 9th, UST had fallen to $0.8, and the signs of a collapse were undeniable. At this time, Pratt sent a message to Do Kwon and the Terraform team via group chat, stating that Jane Street could consider purchasing Luna at a significant discount. While harvesting retail investors, I also prepared to pick up goods in the fire. The defendants named this time, in addition to Pratt, also include Robert Granieri, co-founder of Jane Street, the only remaining founder among the four, and employee Michael Huang. The lawsuit cites the Commodity Exchange Law and the Securities Exchange Law, and also raises charges of fraud and unjust enrichment, requesting a jury trial, seeking compensation, and forfeiting profits. The core statement cited by Bloomberg in the lawsuit is that Jane Street's actions allowed it to "hedge billions of dollars in potential risk exposure at the appropriate time, just hours before the collapse of the Terraform ecosystem. The lawsuit between Jump Trading and the deeper darkness of Jane Street is not an isolated incident. Two months ago, the same liquidator Todd Snyder sued Jump Trading and its co-founder William DiSomma, as well as former Jump Crypto president Kanav Kariya, in federal court in Illinois for $4 billion in damages. The story of Jump is, in a sense, more shocking than Jane Street. The lawsuit reveals a picture that has never been fully pieced together before: as early as May 2021, when UST faced its first anchor crisis, Jump secretly bought about $20 million worth of UST, stabilizing the price back to $1. Later, the public believed in the packaged algorithmic stablecoin story, the algorithm worked, and the system was self-healing. Terraform avoided regulatory scrutiny through this, while Jump, in exchange, obtained over 61 million Luna tokens at a price of $0.40 each, with a market price of around $90 at the time and a discount of over 99%. Jump later sold this batch of tokens, and according to the lawsuit, the estimated profit was about 1.28 billion US dollars. During the final crash in May 2022, Luna Foundation Guard transferred nearly 50000 bitcoins (approximately $1.5 billion) to Jump without a written agreement, ostensibly to protect the market. It is still uncertain where Bitcoin will ultimately go, and the lawsuit states: 'It is unclear whether Jump will further enrich itself through this.'. ”It is worth noting that DiSomma and Kariya refused to answer hundreds of times in previous SEC investigations and inquiries, citing the Fifth Amendment of the Constitution. Jump's subsidiary Tai Mo Shan has settled with the SEC for $123 million in 2024, admitting to "misleading investors". Kariya resigned as the President of Jump Crypto in the same year, citing an investigation by the CFTC. More importantly, according to Jane Street's lawsuit, it was through Jump's information channel that Jane Street was able to obtain some 'non-public key information'. Two cases are connected by an invisible line. But there is another half to this story. Jane Street's response was straightforward: this is a 'desperate lawsuit' and a 'transparent attempt to extract money from the company'. They added that the root cause of losses for Terra and Luna investors lies in the "billion dollar fraud" created by Do Kwon and Terraform management, which will be strongly countered. This sentence is not wrong. Do Kwon admitted to fraud and was sentenced to 15 years in prison; Terraform also paid a fine of $4.47 billion. The death spiral of Luna is predetermined from the mechanism design: algorithmic stablecoins are essentially a system that requires continuous buying and confidence maintenance. Once panic is triggered, the arbitrage mechanism operates in reverse and will self destruct at an exponential rate. But 'Do Kwon is guilty' and 'others are innocent', these two things are not mutually valid. It is a fact that a building has fatal structural defects. During its collapse, whether anyone secretly emptied the most valuable items inside before the firefighters arrived is another independent legal and moral issue. There is another detail worth paying attention to. On the same day that the Jane Street lawsuit was exposed, blockchain tracking researcher ZachXBT announced that it will release a major investigation on February 26, 2026, into the long-term use of internal data by multiple employees for insider trading at one of the most profitable institutions in the cryptocurrency industry. He didn't call anyone by name. But the subtleties of the timeline made the entire encrypted Twitter hold its breath and wait. This story is not over yet. But one thing has already been confirmed: in the crypto market that claims to be "decentralized", the real inequality has never disappeared. It has just moved from the bank's trading desk to behind the smart contracts on the chain, continuing to exist in a more covert form. The Luna incident may just be the most severe tearing of that crack, and those standing on the other side of the crack had already safely evacuated before the wall fell. The money of the wealthy is repaid as much as possible, and the money of the people is divided into 37%. This is the case in the movie, and it is also the case in the encrypted world.