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

Jane Street has requested a US court to reject a lawsuit filed by Terraform Labs' bankruptcy estate, denying allegations that the trading firm contributed to the 2022 collapse of TerraUSD and its sister token Luna. In a Thursday filing, Jane Street and its employees argued that the case is an attempt to deflect responsibility for the failure of the Terra ecosystem, which led to a $40 billion loss in value over several days. The firm urged 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 'extract cash' to compensate for a fraud perpetrated by Terraform itself. The company pointed to existing criminal and civil cases against Terraform founder Do Kwon, who has been sentenced to 15 years in prison for conspiracy and wire fraud, as evidence that the core issues have already been resolved. Terraform's lawsuit, filed in January, accuses Jane Street of insider trading that accelerated the collapse, alleging the firm used confidential information from Terraform insiders to trade ahead of major 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 court's decision on Jane Street's motion may influence how responsibility for the collapse is assigned, with potential implications for the crypto sector.