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

Jane Street has filed a motion with a US court to dismiss a lawsuit brought by the Terraform Labs bankruptcy estate, disputing claims that the trading firm contributed to the 2022 collapse of TerraUSD and Luna. In filings submitted to the Southern District of New York, Jane Street and its employees claim the lawsuit is an attempt to shift responsibility for the Terra ecosystem's failure, which resulted in approximately $40 billion in losses. The firm is seeking a dismissal with prejudice, which would prevent Terraform from pursuing the same claims in the future. Jane Street argues that the core issues surrounding Terra's collapse have already been settled in court, citing cases against Terraform founder Do Kwon, who has been found guilty of conspiracy and wire fraud. The firm maintains that it had no involvement in Terraform's fraud scheme and denies any role in the collapse. Terraform's lawsuit, filed in January, alleges that Jane Street engaged in insider trading, using 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 this narrative, and the court's decision on the motion could have significant implications for the assignment of responsibility for the collapse.