Jane Street Seeks Dismissal of Terraform Lawsuit Linked to UST-LUNA Collapse

Jane Street has petitioned a US court to reject a lawsuit filed by Terraform Labs' bankruptcy estate, denying allegations that the firm contributed to the 2022 downfall of TerraUSD and Luna. In Thursday's filings to the Southern District of New York, Jane Street and its employees stated that the case is an attempt to redirect blame for the Terra ecosystem's collapse, which wiped out approximately $40 billion in value. The company urged the court to dismiss the complaint with prejudice, preventing Terraform from pursuing the same claims again. Jane Street argued that the primary issues surrounding Terra's collapse have already been resolved in court, citing cases against Terraform founder Do Kwon, who pleaded guilty to conspiracy and wire fraud and is serving a 15-year prison term. The firm emphasized that Kwon acknowledged being 'alone responsible for everyone's pain.' Terraform's lawsuit, filed in January by administrator Todd Snyder, accuses Jane Street of insider trading that accelerated the collapse. Snyder alleged that the firm utilized non-public information from Terraform insiders to trade ahead of significant moves. Jane Street disputed this narrative and denied any involvement in the collapse. The company maintained that 'Terraform's fraud scheme — in which Jane Street had no involvement — has already been prosecuted, adjudicated, and punished.' Terraform Labs, founded in 2018, filed for bankruptcy in January 2024, and its downfall had a ripple effect across the crypto sector, contributing to the failures of several firms exposed to the project. The court's decision on Jane Street's motion may influence how responsibility for the collapse is assigned.