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

Jane Street has requested a US court to dismiss a lawsuit filed by Terraform Labs' bankruptcy estate, denying allegations that the trading firm contributed to the 2022 collapse of the TerraUSD stablecoin and its sister token, Luna. In a filing submitted to the Southern District of New York, Jane Street and its employees argue that the case is an attempt to deflect responsibility for the Terra ecosystem's failure, which erased approximately $40 billion in value within days. The firm is urging the court to dismiss the complaint with prejudice, preventing Terraform from pursuing the same claims in the future. According to Jane Street, the lawsuit is an attempt to hold the company liable for a fraud perpetrated by Terraform, and that the core issues surrounding Terra's collapse have already been resolved in court. The company points to the 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 and denies any role in the collapse. 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. However, Jane Street disputes this narrative, and the court's decision on the company's motion could significantly impact how responsibility for the collapse is assigned.