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Jane Street asks court to reject Terraform claims tied to UST-LUNA crash
A filing Thursday said the lawsuit rehashes events already settled in court and seeks damages for losses caused by internal misconduct.
Apr 24, 2026, 3:53 p.m.
What to know:
- Jane Street asked a federal judge to dismiss Terraform Labs’ bankruptcy lawsuit, arguing it is an effort to shift blame for the 2022 collapse of the TerraUSD stablecoin and Luna token.
- The trading firm says Terraform’s fraud has already been adjudicated through criminal and civil cases against founder Do Kwon, who pleaded guilty to conspiracy and wire fraud and received a 15-year prison sentence.
- Terraform’s estate alleges Jane Street used insider information to trade ahead of major UST moves, including large withdrawals that preceded the stablecoin’s depegging, claims Jane Street denies as the court weighs how to assign responsibility for the $40 billion collapse.
The firm urged the court to dismiss the complaint with prejudice, which would prevent Terraform from pursuing the same claims again.
“This case is an attempt by the estate of Terraform Labs to extract cash from Jane Street to foot the bill for a fraud that Terraform itself perpetrated on the market,” the defendants wrote.
Jane Street argued that the core issues behind Terra’s collapse have already been settled in court. It pointed to criminal and civil cases against Terraform founder Do Kwon, who pleaded guilty to conspiracy and wire fraud and is serving a 15-year prison sentence. A jury also found Kwon and Terraform liable for securities fraud. According to the filing, Kwon said he was “alone responsible for everyone’s pain.”
