A private Telegram group called “Bryce’s Secret” is now at the center of a federal lawsuit that accuses one of Wall Street’s most powerful trading firms of profiting from the inside while the Terra ecosystem burned to the ground.

Terraform Labs’ estate, acting through a court-appointed administrator, has filed suit against Jane Street in Manhattan federal court. The core allegation: Jane Street used non-public information shared in that private chat to sell roughly $192 million worth of TerraUSD (UST) just before the algorithmic stablecoin lost its peg and spiraled into one of crypto’s most catastrophic collapses in May 2022.

The alleged playbook

According to the lawsuit, Jane Street employees participated in a private Telegram channel nicknamed “Bryce’s Secret,” where insider information about Terraform Labs circulated. Armed with that intelligence, the firm reportedly dumped approximately 193 million UST right before the stablecoin’s death spiral began.

The complaint alleges Jane Street simultaneously shorted Terra tokens while the ecosystem was collapsing, a strategy that reportedly generated around $134 million in profits.

The lawsuit names Jane Street Group as the primary defendant, along with co-founder Robert Granieri and two employees, Bryce Pratt and Michael Huang.

Jane Street’s defense: blame the house that built it

Jane Street has filed a motion to dismiss the lawsuit. The firm claims its trades were based entirely on publicly available information, and has characterized the lawsuit as Terraform’s estate trying to blame others for the consequences of its own fraud.

Terraform Labs and its co-founder Do Kwon have faced extensive regulatory and legal consequences since the collapse. The SEC reached a settlement with Terraform, and Kwon himself has faced criminal charges in multiple jurisdictions.

Why this matters beyond the courtroom

The Terra collapse wiped out roughly $40 billion in market value across UST and its sister token LUNA in a matter of days.

If the court allows the case to proceed to discovery, Jane Street would potentially need to turn over internal communications, trading records, and details about who was in that Telegram channel and what they knew.