Jane Street Seeks Dismissal of Lawsuit Tied to UST-LUNA Collapse

Jane Street has filed a motion to dismiss a lawsuit brought by the Terraform Labs bankruptcy estate, which alleges that the trading firm contributed to the 2022 collapse of TerraUSD (UST) and its sister token Luna. In its filings, Jane Street argues that the case is an attempt to deflect responsibility for the Terra ecosystem's failure, which wiped out approximately $40 billion in value. The firm asserts that the lawsuit rehashes events that have already been resolved in court and seeks damages for losses caused by Terraform's own internal misconduct. Jane Street is urging the court to dismiss the complaint with prejudice, preventing Terraform from pursuing the same claims in the future. The defendants claim that Terraform is attempting to hold Jane Street liable for a fraud that Terraform itself perpetrated on the market. The firm points to previous criminal and civil cases against Terraform founder Do Kwon, who has been found guilty of conspiracy and wire fraud and is currently serving a 15-year prison sentence. According to Jane Street, the core issues surrounding Terra's collapse have already been settled, with Kwon having acknowledged his responsibility for the harm caused. The lawsuit, filed by Terraform administrator Todd Snyder, accuses Jane Street of insider trading that accelerated 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 firm's motion to dismiss the lawsuit could have significant implications for how responsibility for the Terra ecosystem's collapse is assigned.