Trading firm Jane Street has urged a U.S. court to dismiss a lawsuit filed by the administrator of bankrupt Terraform Labs, which accuses the firm of insider trading that deepened the Terra ecosystem’s collapse.
In a motion submitted Thursday in Manhattan federal court, Jane Street argued the case is an effort “to extract cash from Jane Street to foot the bill for a fraud that Terraform itself perpetrated on the market.”
“Terraform now claims it was victimized by Jane Street’s trading,” the filing said. “The problem with this theory is that Terraform’s fraud scheme — in which Jane Street had no involvement — has already been prosecuted, adjudicated, and punished.”
The lawsuit was filed in February by Terraform’s court-appointed administrator, Todd Snyder, against Jane Street, co-founder Robert Granieri, and employees Bryce Pratt and Michael Huang, alleging they traded Terra tokens using nonpublic information obtained from Terraform insiders.
Terraform collapsed in May 2022 after its algorithmic stablecoin, TerraUSD, lost its peg to the U.S. dollar, triggering a sharp سقوط in the closely linked LUNA token and erasing roughly $40 billion in value.
In its motion, Jane Street argued that investors “saw the public signs of that collapse” and that the firm simply sought to “sell a deteriorating investment as the market was visibly collapsing.”
The firm added that the causes of Terraform’s downfall have already been settled in court, pointing out that founder Do Kwon pleaded guilty to conspiracy and wire fraud and was sentenced to 15 years in prison.
Jane Street also described Terraform’s complaint as “self-defeating,” noting that Terraform itself said the firm’s largest TerraUSD sale occurred 10 minutes after the alleged material nonpublic information had already become visible to the market.
It further argued that Terraform failed to identify any specific material, nonpublic information Jane Street received, including claims that the firm sold additional tokens in early May 2022 as Terraform shifted to a new liquidity pool.
“Plaintiff pleads ‘on information and belief’ that Jane Street learned the timing of Terraform’s transition to a new liquidity pool through ‘back-channel communications,’ yet cannot identify a single communication disclosing that timing — despite extensive pre-suit discovery,” the motion stated.
Jane Street asked the court to dismiss the case with prejudice, which would bar Terraform from filing the same claims again.
