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

Jane Street has filed a motion with a US court to dismiss a lawsuit brought by the Terraform Labs bankruptcy estate, contesting claims that the trading firm contributed to the 2022 collapse of the TerraUSD stablecoin and its associated token, Luna. In filings submitted to the Southern District of New York, Jane Street and its employees argue that the lawsuit is an attempt to shift responsibility for the failure of the Terra ecosystem, which resulted in the loss of approximately $40 billion in value. The company is seeking a dismissal with prejudice, which would prevent 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 convicted of conspiracy and wire fraud. The company asserts that Kwon has taken responsibility for the fraud, stating he was 'alone responsible for everyone's pain.' Terraform's lawsuit, filed by administrator Todd Snyder, alleges that Jane Street engaged in insider trading, using confidential information from Terraform insiders to trade ahead of significant market moves. 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 collapse of Terraform Labs, which filed for bankruptcy in January 2024, has had far-reaching consequences for the crypto sector, contributing to the failures of several firms with exposure to the project. The court's decision on Jane Street's motion may have significant implications for the assignment of responsibility for the collapse.