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

Jane Street has filed a motion with a US court to dismiss a lawsuit brought by the bankruptcy estate of Terraform Labs, arguing that the claims against it are an attempt to shift responsibility for the 2022 collapse of the Terra ecosystem. The firm asserts that the lawsuit rehashes events already settled in court and that it played no role in the collapse of the TerraUSD stablecoin and its sister token, Luna. The lawsuit, filed in January, alleges that Jane Street engaged in insider trading, using nonpublic information to trade ahead of major moves and exacerbate the collapse. However, Jane Street disputes these claims, pointing to previous court rulings that have already held Terraform founder Do Kwon liable for conspiracy, wire fraud, and securities fraud. The firm argues that Terraform's own misconduct, rather than any actions by Jane Street, was the primary cause of the collapse, which wiped out approximately $40 billion in value. The court's decision on the motion could have significant implications for the assignment of responsibility for the collapse and its ripple effects across the crypto sector.