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

Jane Street has petitioned a US court to dismiss a lawsuit filed by the Terraform Labs bankruptcy estate, denying claims that the trading firm contributed to the 2022 collapse of the TerraUSD stablecoin and its sister token, 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 erased roughly $40 billion in value. The firm has requested that the court dismiss the complaint with prejudice, preventing Terraform from pursuing the same claims in the future. Jane Street argues that the core issues surrounding Terra's collapse have already been settled in court, citing criminal and civil cases against Terraform founder Do Kwon, who has been convicted of conspiracy and wire fraud and is currently serving a 15-year prison sentence. The company maintains that Kwon and Terraform have already been held liable for securities fraud and that the founder has acknowledged his sole responsibility for the collapse. Terraform's lawsuit, filed by administrator Todd Snyder, alleges that Jane Street engaged in insider trading, utilizing nonpublic information to trade ahead of significant market moves. However, Jane Street disputes this narrative, denying any involvement in the collapse and asserting that Terraform's fraud scheme has already been prosecuted and punished. The court's decision on Jane Street's motion may have significant implications for the assignment of responsibility for the Terra ecosystem's collapse, which had far-reaching consequences for the crypto sector.