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

Jane Street has petitioned a US court to reject a lawsuit filed by the Terraform Labs bankruptcy estate, contesting claims that the trading firm played a role in the 2022 collapse of TerraUSD and Luna. In filings submitted to the Southern District of New York, Jane Street and its employees assert that the case is an attempt to deflect responsibility for the Terra ecosystem's failure, which resulted in a $40 billion loss in value. The company is seeking to have the complaint dismissed with prejudice, preventing Terraform from pursuing the same claims in the future. According to Jane Street, the core issues surrounding Terra's collapse have already been settled in court, citing cases against Terraform founder Do Kwon, who has been convicted of conspiracy and wire fraud. The firm argues that Terraform's lawsuit, filed in January, is an attempt to hold Jane Street liable for a fraud perpetrated by Terraform itself. Terraform's lawsuit alleges that Jane Street engaged in insider trading, using nonpublic information to trade ahead of major market moves. However, Jane Street disputes these claims, maintaining that it had no involvement in Terraform's fraud scheme, which has already been prosecuted and punished. The court's decision on Jane Street's motion may have significant implications for the assignment of responsibility in the collapse of the Terra ecosystem, which had far-reaching consequences for the crypto sector.