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 of triggering the 2022 collapse of TerraUSD (UST) and its sister token Luna are unfounded. In court filings, Jane Street and its employees stated that the lawsuit is an attempt to deflect responsibility for the Terra ecosystem's failure, which wiped out approximately $40 billion in value. The firm is urging the court to reject the complaint, citing that the core issues surrounding Terra's collapse have already been settled in previous court cases. Jane Street pointed to the criminal and civil cases against Terraform founder Do Kwon, who pleaded guilty to conspiracy and wire fraud, as evidence that the matter has been resolved. The firm denies any involvement in the collapse and argues that Terraform's own misconduct led to the downfall. Terraform's lawsuit, filed in January, alleges that Jane Street engaged in insider trading, using nonpublic information to trade ahead of major moves, including large withdrawals from the Curve liquidity pool. However, Jane Street disputes this narrative, maintaining that it had no role in the collapse and that Terraform's fraud scheme has already been prosecuted and punished. The court's decision on Jane Street's motion could have significant implications for the assignment of responsibility for the Terra ecosystem's collapse, which had far-reaching consequences for the crypto sector.