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 Terraform Labs' bankruptcy estate, denying allegations that the trading firm played a role in the 2022 collapse of TerraUSD (UST) and its sister token Luna. In court filings, Jane Street and its employees claim the lawsuit is an attempt to deflect responsibility for the failure of the Terra ecosystem, which led to the loss of approximately $40 billion in value. The firm is urging the court to 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 found liable for securities fraud and is serving a prison sentence. According to Jane Street, Kwon has acknowledged being 'alone responsible for everyone's pain.' The lawsuit, filed by Terraform administrator Todd Snyder, accuses Jane Street of insider trading, alleging the firm used confidential 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 outcome of Jane Street's motion could have significant implications for the assignment of responsibility for the collapse of Terraform Labs, which filed for bankruptcy in January 2024 and had a ripple effect across the crypto sector, contributing to the failures of several firms exposed to the project.