This is just obnoxious. Invest in experimental instruments without doing your due diligence and that's on you. If you don't have the humility to reckon with that you definitely don't deserve $40b of other peoples' fake money.
For me it's the constant feel of everything being "exciting" while no real information is actually conveyed. It's a common tactic of both AI and clickbaity articles. There's no hard evidence here, just hearsay. Nothing really to report until there's more information. I don't want drama in reporting, I want facts. But I guess I'm an outlier which is how we got both this AI style and the clickbait it was trained on...
It also doesn't help that all the title graphics have the same dramatic feeling and are certainly AI generated.
You could also check Matt Levine from Money Stuff - Bloomberg. He is quite known on HN. The way he writes plus his great knowledge with no BS makes him my favorite (and only) journalist I follow.
> Look, I am sorry. But if you go to Jump Trading and Jane Street and say “hello, I have an unregulated poorly designed mechanism that could lead to $50 billion of market value collapsing overnight, would you like to trade with me,” they are going to say yes, but their eyes are going to light up, you know? If at Time 0 you give them an extremely gameable system that can produce billions of dollars of profit, at Time 10 your system is going to be a smoking wreckage and they are going to have billions of dollars of profit. That’s their whole job, you know? I couldn’t tell you in advance what all the intermediate steps will be, and in fact in hindsight I cannot tell you what the intermediate steps actually were, how Jump and Jane Street made money off the collapse of Terra. But as a heuristic, I mean, come on. Terra was like “hello we have a balloon full of money, here is a pin, dooooooon’t pop the balloon.” Guess what!
10mins is a lifetime in capital and crypto markets - I find it hard to believe that trading 10mins after the Terraform Labs swap hit the chain constitutes insider trading.
The claim of artificial price inflation with Jump sounds more questionable but TFA doesn’t seem to put it front and centre
Especially since it's a public ledger. Anyone with a program watching the chain is going to see it. From there they can exercise whatever trade they want for their gain.
Doesn’t that 10m lag make it seem more like insider training? An automated trade would happen nearly instantly, 10m is plenty of time for insiders to send some texts or make some calls.
Didn't many of the FTX cronies come from Jane Street?
So many of the biggest fraudsters in crypto came from tradfi and their scams were discovered because they picked the one asset class where being unable to process withdrawals implies a 100% chance of fraud. It makes you wonder how much fraud occurs in tradfi but it goes undiscovered because nobody can self-custody their paper metals or paper stocks.
> It makes you wonder how much fraud occurs in tradfi but it goes undiscovered because nobody can self-custody their paper metals or paper stocks.
Better not mention the FinCEN files either. [0] Where over $100B to $2TN dollars worth of illicit transations from criminals and fraudsters were knowingly allowed by banks and even ponzi schemes were freely allowed as well [1].
It's a bad headline. They used publicly available blockchain transactions and didn't cause the collapse of the Terra ecosystem. Terra collapsed because it was a Ponzi scheme offering 20% APY on a fake stablecoin. The Terra stablecoin was not backed by real dollars, but instead by a cryptocurrency called Luna that did nothing else other than let you issue Terra stablecoins.
"I am sorry. But if you go to Jump Trading and Jane Street and say “hello, I have an unregulated poorly designed mechanism that could lead to $50 billion of market value collapsing overnight, would you like to trade with me,” they are going to say yes, but their eyes are going to light up, you know? If at Time 0 you give them an extremely gameable system that can produce billions of dollars of profit, at Time 10 your system is going to be a smoking wreckage and they are going to have billions of dollars of profit. That’s their whole job, you know? I couldn’t tell you in advance what all the intermediate steps will be, and in fact in hindsight I cannot tell you what the intermediate steps actually were, how Jump and Jane Street made money off the collapse of Terra. But as a heuristic, I mean, come on. Terra was like “hello we have a balloon full of money, here is a pin, dooooooon’t pop the balloon.” Guess what!"
The $50bn is what you get when you multiply the number of coins times the price of one coin. This is a kind of fun number to think about but there are a lot of ways it doesn’t match up with reality.
Like, if I make a company with ten billion shares, and then put shares for sale at $5 a piece, and you buy one, then my company would also have a $50bn valuation, by the same logic that Terra / Luna had a $50bn valuation.
There was never a real $50bn to be evaporated. It's like saying that $1.2tn evaporated in the Bitcoin market drawdown since October - it doesn't mean value has been destroyed, it means the market's estimate of how much value existed was wrong.
you might consider me an ass, but I think every dollar you put into crypto should be considered dead money. it is not protected by anything. you are gambling on nothing
That’s the lesson we should be learning, but I’m worried the lesson we’re actually learning <sees 18yo crypto bro drive by in a Lamborghini> is that regulations hinder innovation.
Saying Jane Street caused a $40 billion loss is wrong. Terra caused the loss because it was a Ponzi scheme that claimed to offer 20% APY on a stablecoin that wasn't backed by any real dollars.
> The Anchor Protocol was a lending and borrowing protocol built on the Terra chain. Investors who deposited UST in the Anchor Protocol were receiving a 19.45% yield paid out from Terra's reserves.
It was a system built on sleight of hand, with a cover story just complex enough that it worked for a while.
How do you create a stablecoin? There are two ways in general. One is to have it backed 1:1 with a bank account somewhere that contains the actual currency it represents. In theory you then allow people to freely exchange back and forth between tokens and dollars. Tether kinda/sort works this way in theory.
The other way is to play games with algorithms and try to use the market against itself to create stability. Terra (UST) attempted to do this by running a complex scheme that leveraged a floating backing token, and a smart contract which allowed you to exchange 1 UST for $1 worth of newly created Luna. If UST starts to lose its peg and become worth less than a dollar, people buy it to exchange for $1 worth of Luna, sell the Luna for a profit, so arbitrage sorts the price out. If it becomes worth more than a dollar, you buy Luna, burn it to convert to new UST, then sell that for a profit.
How do you get Luna to be worth anything though? Well you offer inducements like a ridiculous interest rate, high enough that anyone outside the cryptocurrency bubble would immediately see a red flag, and which then has to be subsidised somehow ...
Even with the best will in the world systems like this could best be described as meta-stable, i.e. it'll smooth out minor perturbations but there are limits. And that limit was Luna dumping massively.
You have to connect this to the market or the article. I certainly don’t believe Jane Street is keeping crypto down somehow. What kind of non-conspiracy theory are you proposing?
The tweet used as the source is a troll. That guy uses the "I just got off the phone with..." template all the time to joke/troll about things going on in markets.
How can an incredible pile of fraud successfully sue another company? The only source of news I trust on Terra is
https://twitter.com/FatManTerra
This is just obnoxious. Invest in experimental instruments without doing your due diligence and that's on you. If you don't have the humility to reckon with that you definitely don't deserve $40b of other peoples' fake money.
Is there an article about this written by a human? The “it’s not X. It’s Y” is too distracting.
For me it's the constant feel of everything being "exciting" while no real information is actually conveyed. It's a common tactic of both AI and clickbaity articles. There's no hard evidence here, just hearsay. Nothing really to report until there's more information. I don't want drama in reporting, I want facts. But I guess I'm an outlier which is how we got both this AI style and the clickbait it was trained on...
It also doesn't help that all the title graphics have the same dramatic feeling and are certainly AI generated.
Waiting for the only human I trust in this space to report on this:
https://www.web3isgoinggreat.com/
You could also check Matt Levine from Money Stuff - Bloomberg. He is quite known on HN. The way he writes plus his great knowledge with no BS makes him my favorite (and only) journalist I follow.
Edit: actually someone already found his article and posted it: https://news.ycombinator.com/item?id=47160848
+1 on that. Thanks!
I'm sure she'll be right on it...
She's far braver than most of us. I self-censor all the time on this website.
Havel's greengrocer, placing the sign.
Carney at Davos, his eyes uncovered.
“It’s not about human writing. It’s about the message.”
AI is turning the entire web into LinkedIn itisnotaboutism.
This this this so much. Thanks for pointing it out.
> Ten minutes is not a coincidence. It is a trade.
Wow, that's... considerably worse than typical output nowadays.
Matt Levine has a take: https://www.bloomberg.com/opinion/newsletters/2026-02-24/ai-...
> Look, I am sorry. But if you go to Jump Trading and Jane Street and say “hello, I have an unregulated poorly designed mechanism that could lead to $50 billion of market value collapsing overnight, would you like to trade with me,” they are going to say yes, but their eyes are going to light up, you know? If at Time 0 you give them an extremely gameable system that can produce billions of dollars of profit, at Time 10 your system is going to be a smoking wreckage and they are going to have billions of dollars of profit. That’s their whole job, you know? I couldn’t tell you in advance what all the intermediate steps will be, and in fact in hindsight I cannot tell you what the intermediate steps actually were, how Jump and Jane Street made money off the collapse of Terra. But as a heuristic, I mean, come on. Terra was like “hello we have a balloon full of money, here is a pin, dooooooon’t pop the balloon.” Guess what!
https://www.wsj.com/finance/currencies/jane-street-accused-o... is a pretty normal one
The awful graphic at the top is certainly not made by a human.
Where is "it's not X. It's Y"? I didn't notice it.
The negative parallelism pattern is broader than the literal phrasing "not X, but Y". Here are some examples from the article:
- "A new lawsuit doesn’t just revisit the $40 billion Terra-Luna meltdown; it questions whether..."
- "Ten minutes is not a coincidence. It is a trade."
- "It reads less like a rescue offer and more like a firm positioning itself..."
- "These are not isolated; they are part of Snyder’s broader efforts..."
- "Not just as bystanders, but as alleged participants..."
Math papers using LLMs: It's not true, it's false
Thanks. I probably didn't notice them because they don't seem at all unnatural.
10mins is a lifetime in capital and crypto markets - I find it hard to believe that trading 10mins after the Terraform Labs swap hit the chain constitutes insider trading.
The claim of artificial price inflation with Jump sounds more questionable but TFA doesn’t seem to put it front and centre
Especially since it's a public ledger. Anyone with a program watching the chain is going to see it. From there they can exercise whatever trade they want for their gain.
Doesn’t that 10m lag make it seem more like insider training? An automated trade would happen nearly instantly, 10m is plenty of time for insiders to send some texts or make some calls.
Didn't many of the FTX cronies come from Jane Street?
So many of the biggest fraudsters in crypto came from tradfi and their scams were discovered because they picked the one asset class where being unable to process withdrawals implies a 100% chance of fraud. It makes you wonder how much fraud occurs in tradfi but it goes undiscovered because nobody can self-custody their paper metals or paper stocks.
Jane Street was also banned from trading in India because they couldn’t stop manipulating the market
> It makes you wonder how much fraud occurs in tradfi but it goes undiscovered because nobody can self-custody their paper metals or paper stocks.
Better not mention the FinCEN files either. [0] Where over $100B to $2TN dollars worth of illicit transations from criminals and fraudsters were knowingly allowed by banks and even ponzi schemes were freely allowed as well [1].
[0] https://www.icij.org/investigations/fincen-files/global-bank...
[1] https://www.bbc.co.uk/news/uk-54225572
I'm unclear what insider trading means in the context of crypto. Inside what?
It's a bad headline. They used publicly available blockchain transactions and didn't cause the collapse of the Terra ecosystem. Terra collapsed because it was a Ponzi scheme offering 20% APY on a fake stablecoin. The Terra stablecoin was not backed by real dollars, but instead by a cryptocurrency called Luna that did nothing else other than let you issue Terra stablecoins.
I mean they are being sued for insider trading, not exactly a bad headline maybe it could say alleged?
It seems extremely unlikely to me, a casual observer of the shit show that was Luna/Terra, that the suit would be successful
As always, Matt Levine has the best take on this:
https://www.bloomberg.com/opinion/newsletters/2026-02-24/ai-...
"I am sorry. But if you go to Jump Trading and Jane Street and say “hello, I have an unregulated poorly designed mechanism that could lead to $50 billion of market value collapsing overnight, would you like to trade with me,” they are going to say yes, but their eyes are going to light up, you know? If at Time 0 you give them an extremely gameable system that can produce billions of dollars of profit, at Time 10 your system is going to be a smoking wreckage and they are going to have billions of dollars of profit. That’s their whole job, you know? I couldn’t tell you in advance what all the intermediate steps will be, and in fact in hindsight I cannot tell you what the intermediate steps actually were, how Jump and Jane Street made money off the collapse of Terra. But as a heuristic, I mean, come on. Terra was like “hello we have a balloon full of money, here is a pin, dooooooon’t pop the balloon.” Guess what!"
I don't really follow this space, but is evaporating $50bn not a concern to anybody?
The $50bn is what you get when you multiply the number of coins times the price of one coin. This is a kind of fun number to think about but there are a lot of ways it doesn’t match up with reality.
Like, if I make a company with ten billion shares, and then put shares for sale at $5 a piece, and you buy one, then my company would also have a $50bn valuation, by the same logic that Terra / Luna had a $50bn valuation.
The reality is that the $50bn was already gone, the collapse just revealed it.
It's like with Madoff; the billions weren't lost when it collapsed, the billions were already gone (or never existed).
There was never a real $50bn to be evaporated. It's like saying that $1.2tn evaporated in the Bitcoin market drawdown since October - it doesn't mean value has been destroyed, it means the market's estimate of how much value existed was wrong.
you might consider me an ass, but I think every dollar you put into crypto should be considered dead money. it is not protected by anything. you are gambling on nothing
This is about a crypto transaction leading to the Terra/Luna collapse.
If there is one benefit coming from crypto is that it explains clearly why finance is a regulated industry.
That’s the lesson we should be learning, but I’m worried the lesson we’re actually learning <sees 18yo crypto bro drive by in a Lamborghini> is that regulations hinder innovation.
Saying Jane Street caused a $40 billion loss is wrong. Terra caused the loss because it was a Ponzi scheme that claimed to offer 20% APY on a stablecoin that wasn't backed by any real dollars.
I remember this in the news, but I had to look stuff up on Wikipedia to refresh my memory:
https://en.wikipedia.org/wiki/Terra_(blockchain)
> The Anchor Protocol was a lending and borrowing protocol built on the Terra chain. Investors who deposited UST in the Anchor Protocol were receiving a 19.45% yield paid out from Terra's reserves.
What the fuck?
It was a system built on sleight of hand, with a cover story just complex enough that it worked for a while.
How do you create a stablecoin? There are two ways in general. One is to have it backed 1:1 with a bank account somewhere that contains the actual currency it represents. In theory you then allow people to freely exchange back and forth between tokens and dollars. Tether kinda/sort works this way in theory.
The other way is to play games with algorithms and try to use the market against itself to create stability. Terra (UST) attempted to do this by running a complex scheme that leveraged a floating backing token, and a smart contract which allowed you to exchange 1 UST for $1 worth of newly created Luna. If UST starts to lose its peg and become worth less than a dollar, people buy it to exchange for $1 worth of Luna, sell the Luna for a profit, so arbitrage sorts the price out. If it becomes worth more than a dollar, you buy Luna, burn it to convert to new UST, then sell that for a profit.
How do you get Luna to be worth anything though? Well you offer inducements like a ridiculous interest rate, high enough that anyone outside the cryptocurrency bubble would immediately see a red flag, and which then has to be subsidised somehow ...
Even with the best will in the world systems like this could best be described as meta-stable, i.e. it'll smooth out minor perturbations but there are limits. And that limit was Luna dumping massively.
A ponzi crypto scheme? It is the only kind.
Due to insider commentary: Terraform retained nonpublic information.
And oddly, suddenly the daily 10 AM Jane Street BTC sells stop and suddenly crypto is able to rally...
Probably coincidence - general market is up strongly too. Or, too hard to tell anyway.
You have to connect this to the market or the article. I certainly don’t believe Jane Street is keeping crypto down somehow. What kind of non-conspiracy theory are you proposing?
The article links to https://x.com/InvestWithD/status/2026381475776692426 which purportedly quotes a Jane Street insider that after pausing BTC activity, they expect BTC will go up.
I personally don't understand how any of this works.
The tweet used as the source is a troll. That guy uses the "I just got off the phone with..." template all the time to joke/troll about things going on in markets.