Jane Street Requests Court 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, which alleges the trading firm contributed to the 2022 collapse of the TerraUSD stablecoin and its Luna token. In court filings, Jane Street and its employees argue 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 seeking a dismissal with prejudice to prevent Terraform from pursuing the same claims in the future. The defendants assert that the case is an effort to hold Jane Street liable for a fraud perpetrated by Terraform, citing prior court rulings that have already settled the core issues surrounding Terra's collapse, including criminal and civil cases against Terraform founder Do Kwon. Jane Street maintains that it had no involvement in Terraform's fraud scheme and denies any role in the collapse, pointing to Kwon's admission of responsibility for the ecosystem's failure. Terraform's lawsuit, filed in January, accuses Jane Street of insider trading, alleging the firm used confidential information to trade ahead of major market moves, including large withdrawals from the Curve liquidity pool that preceded UST losing its dollar peg. Jane Street disputes these claims, and the court's decision on the motion to dismiss could significantly impact the assignment of responsibility for the collapse.