Jane Street Seeks Dismissal of Terraform Lawsuit Over 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 to the Southern District of New York, Jane Street and several employees claimed that the lawsuit is an attempt to shift responsibility for the Terra ecosystem's failure, which wiped out approximately $40 billion in value. The firm is urging the court to dismiss the complaint with prejudice, preventing Terraform from pursuing the same claims again. Jane Street argued that the primary issues surrounding Terra's collapse have already been resolved in court, citing cases against Terraform founder Do Kwon, who pleaded guilty to conspiracy and wire fraud and is currently serving a 15-year prison sentence. According to the filing, Kwon acknowledged being 'alone responsible for everyone's pain.' Terraform's lawsuit, filed in January by administrator Todd Snyder, alleges that Jane Street engaged in insider trading, using nonpublic 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 — in which Jane Street had no involvement — has already been prosecuted, adjudicated, and punished.' The court's decision on Jane Street's motion could significantly impact how responsibility for the collapse is assigned, as Terraform Labs' downfall had far-reaching consequences for the crypto sector, contributing to the failures of several firms exposed to the project.