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

Jane Street has filed a motion to dismiss a lawsuit brought by Terraform Labs' bankruptcy estate, denying allegations that it contributed to the 2022 collapse of the TerraUSD stablecoin and its sister token, Luna. In a filing to the Southern District of New York, Jane Street and its employees argued that the case is an attempt to deflect responsibility for the failure of the Terra ecosystem, which resulted in a $40 billion loss. The firm urged the court to reject the complaint, citing that the core issues surrounding Terra's collapse have already been resolved in court, including criminal and civil cases against Terraform founder Do Kwon. Jane Street maintained that it had no involvement in Terraform's fraud scheme, which has already been prosecuted and punished. The lawsuit, filed in January, accused Jane Street of insider trading, alleging that it used nonpublic information to trade ahead of major moves, including large withdrawals from the Curve liquidity pool that preceded UST losing its dollar peg. However, Jane Street disputes this narrative, denying any role in the collapse and arguing that the estate of Terraform Labs is attempting to extract cash to cover the costs of its own fraudulent activities.