Court Urged to Dismiss Terraform Claims Against Jane Street Over UST-LUNA Collapse

Jane Street has petitioned a US court to dismiss a lawsuit filed by Terraform Labs' bankruptcy estate, contesting allegations that the trading firm contributed to the 2022 collapse of TerraUSD and Luna. In a Thursday filing, Jane Street and its employees claimed the lawsuit is an attempt to deflect responsibility for the Terra ecosystem's demise, which saw $40 billion in value erased in a matter of days. The firm is seeking a dismissal with prejudice, which would prevent Terraform from pursuing the same claims in the future. According to Jane Street, the core issues surrounding Terra's collapse have already been settled in court, citing cases against Terraform founder Do Kwon, who has been found liable for securities fraud and is currently serving a prison sentence. Terraform's lawsuit, filed in January, accuses Jane Street of insider trading, alleging the firm used confidential information to trade ahead of major market moves. However, Jane Street disputes these claims, maintaining that it had no involvement in Terraform's fraud scheme and denying any role in the collapse. The case's outcome may have significant implications for the assignment of responsibility in the collapse of the Terra ecosystem, which has had far-reaching consequences for the crypto sector.