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

Jane Street has filed a motion to dismiss a lawsuit brought by the bankruptcy estate of Terraform Labs, arguing that the claims it helped trigger the 2022 collapse of TerraUSD and Luna are unfounded. In a filing to the Southern District of New York, Jane Street and its employees stated that the case is an attempt to deflect responsibility for the failure of the Terra ecosystem, which wiped out approximately $40 billion in value. The firm requested that the court 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 hold the firm liable for a fraud perpetrated by Terraform itself. The firm pointed to previous court cases against Terraform founder Do Kwon, who has been found guilty of conspiracy and wire fraud and is currently serving a 15-year prison sentence. Jane Street argued that Kwon's admission of responsibility for the collapse, stating he was 'alone responsible for everyone's pain,' further supports their claim that the core issues have already been settled. Terraform's lawsuit, filed by administrator Todd Snyder, alleges that Jane Street engaged in insider trading, using nonpublic information to trade ahead of major moves and contributing to the collapse. However, Jane Street disputes this narrative and denies any involvement in the collapse. The firm maintains that Terraform's fraud scheme has already been prosecuted, adjudicated, and punished, and that it had no involvement in the scheme. The court's decision on Jane Street's motion could have significant implications for the assignment of responsibility for the collapse of the Terra ecosystem, which had a ripple effect across the crypto sector and contributed to the failures of several firms exposed to the project.