Jane Street Seeks Dismissal of Lawsuit Tied to TerraUSD and Luna Collapse

Jane Street has filed a motion to dismiss a lawsuit brought by the bankruptcy estate of Terraform Labs, arguing that the claims against the trading firm are an attempt to deflect responsibility for the 2022 collapse of the TerraUSD stablecoin and its sister token Luna. The firm contends that the lawsuit rehashes events that have already been resolved in court and seeks damages for losses caused by Terraform's own internal misconduct. In its filing, Jane Street asserts that the Terra ecosystem's collapse, which erased approximately $40 billion in value, was the result of Terraform's fraud scheme, in which Jane Street had no involvement. The company points to previous criminal and civil 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 denies any role in the collapse and argues that the court should dismiss the complaint with prejudice, preventing Terraform from pursuing the same claims in the future. The lawsuit, filed by Terraform administrator Todd Snyder, alleges that Jane Street engaged in insider trading, using nonpublic information from Terraform insiders to trade ahead of major moves, including large withdrawals from the Curve liquidity pool that preceded UST losing its dollar peg. However, Jane Street disputes this narrative, maintaining that it had no involvement in Terraform's fraud scheme and that the core issues behind the collapse have already been settled in court.