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

Jane Street has requested a US court to dismiss a lawsuit filed by Terraform Labs' bankruptcy estate, denying allegations that the trading firm contributed to the 2022 collapse of the TerraUSD stablecoin and its sister token Luna. In a filing submitted to the Southern District of New York, Jane Street argued that the case is an attempt to deflect responsibility for the Terra ecosystem's failure, which wiped out approximately $40 billion in value. The firm urged the court to dismiss the complaint with prejudice, preventing Terraform from pursuing the same claims in the future. Jane Street contends that the core issues surrounding Terra's collapse have already been resolved in court, citing criminal and civil cases against Terraform founder Do Kwon, who pleaded guilty to conspiracy and wire fraud. The firm maintains that Kwon's actions, not its own, were responsible for the collapse. Terraform's lawsuit, filed in January, accuses Jane Street of insider trading that accelerated the collapse, alleging the firm used non-public information to trade ahead of major moves. Jane Street disputes this narrative, denying any involvement in the collapse and arguing 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 how responsibility for the collapse is assigned, with potential ripple effects across the crypto sector.