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

Jane Street has petitioned a US court to reject a lawsuit filed by Terraform Labs' bankruptcy estate, denying allegations that the firm contributed to the 2022 collapse of TerraUSD and Luna. In court filings, Jane Street and its employees argue that the lawsuit is an attempt to shift responsibility for the Terra ecosystem's failure, which wiped out 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. 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 pleaded guilty to conspiracy and wire fraud. Jane Street maintains that it had no involvement in Terraform's fraud scheme, which has already been prosecuted and punished. Terraform's lawsuit, filed in January, accuses Jane Street of insider trading, alleging that the firm used nonpublic information to trade ahead of major moves, including large withdrawals from the Curve liquidity pool that preceded UST losing its dollar peg. Jane Street disputes these claims, denying any role in the collapse. The court's decision on Jane Street's motion could impact the assignment of responsibility for the collapse, which had far-reaching consequences for the crypto sector.