Jane Street Seeks Dismissal of Terraform Lawsuit Over UST-LUNA Collapse

Jane Street has petitioned a US court to dismiss a lawsuit filed by the bankruptcy estate of Terraform Labs, contesting allegations that the trading firm contributed to the 2022 collapse of TerraUSD and Luna. In filings submitted to the Southern District of New York, Jane Street and its employees argued that the case is an attempt to deflect blame for the failure of the Terra ecosystem, which resulted in the loss of approximately $40 billion in value. The firm requested that the court dismiss the complaint with prejudice, preventing Terraform from pursuing the same claims in the future. According to Jane Street, the core issues surrounding Terra's collapse have already been resolved in court, citing criminal and civil cases against Terraform founder Do Kwon, who has been sentenced to 15 years in prison for conspiracy and wire fraud. Jane Street maintains that it had no involvement in Terraform's fraud scheme, which has already been prosecuted and punished. Terraform's lawsuit, filed in January, accuses Jane Street of insider trading that accelerated the collapse, alleging the firm used nonpublic information to trade ahead of major moves. Jane Street disputes these claims, denying any role in the collapse. The company's motion argues that Terraform's lawsuit is an attempt to shift responsibility for the collapse, which has already been attributed to internal misconduct. The court's decision on Jane Street's motion may influence how responsibility for the collapse is assigned, with potential implications for the crypto sector.