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

Jane Street has filed a motion to dismiss a lawsuit brought by the Terraform Labs bankruptcy estate, arguing that the claims of triggering the 2022 collapse of TerraUSD and Luna are unfounded. In court filings, Jane Street and its employees assert that the lawsuit is an attempt to shift responsibility for the Terra ecosystem's failure, which resulted in approximately $40 billion in losses. The firm is seeking a dismissal with prejudice to 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, with Terraform founder Do Kwon having pleaded guilty to conspiracy and wire fraud and being sentenced to 15 years in prison. A jury also found Kwon and Terraform liable for securities fraud, with Kwon acknowledging he was 'alone responsible for everyone's pain.' The lawsuit, filed by Terraform administrator Todd Snyder, alleges that Jane Street engaged in insider trading, using nonpublic information to trade ahead of major moves and accelerate the collapse. However, Jane Street disputes this narrative, denying any involvement in the collapse and maintaining that Terraform's fraud scheme has already been prosecuted and punished. The court's decision on Jane Street's motion may have significant implications for the assignment of responsibility for the collapse of Terraform Labs, which filed for bankruptcy in January 2024 and had a ripple effect across the crypto sector.