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 against it are an attempt to deflect responsibility for the 2022 collapse of the TerraUSD stablecoin and Luna token. In court filings, Jane Street and its employees contend that the lawsuit rehashes events that have already been resolved in court and seeks damages for losses caused by Terraform's own internal misconduct. The firm is urging the court to reject the complaint with prejudice, which would prevent Terraform from pursuing the same claims in the future. According to Jane Street, the core issues behind Terra's collapse have already been addressed in court, with Terraform founder Do Kwon having pleaded guilty to conspiracy and wire fraud and been sentenced to 15 years in prison. A jury has also found Kwon and Terraform liable for securities fraud. Jane Street argues that it had no involvement in Terraform's fraud scheme and that the lawsuit is an attempt to extract cash from the firm to compensate for Terraform's own wrongdoing. The lawsuit, filed by Terraform administrator Todd Snyder in January, alleges that Jane Street engaged in insider trading that hastened the collapse of the Terra ecosystem. However, Jane Street disputes this narrative and denies any role in the collapse. The firm maintains that Terraform's fraud scheme has already been prosecuted, adjudicated, and punished, and that it is not responsible for the collapse. The court's decision on Jane Street's motion could have significant implications for how responsibility for the collapse is assigned, with potential ripple effects across the crypto sector.