Jane Street Seeks Dismissal of Terraform Labs' Bankruptcy Lawsuit Alleging Insider Trading in 2022 UST

Jane Street submitted two filings on Thursday, April 24, 2026, to the Southern District of New York asking a federal judge to dismiss Terraform Labs’ bankruptcy lawsuit. The filings urge the court to dismiss the complaint with prejudice, preventing Terraform from pursuing the same claims again. m.

The lawsuit was filed in January 2024 by Terraform Labs, which had filed for bankruptcy that month. It was submitted by administrator Todd Snyder. The suit accuses Jane Street of using insider information to trade ahead of major TerraUSD (UST) moves, including large withdrawals from the Curve liquidity pool that preceded UST losing its dollar peg in 2022.

On May 7, 2022, Terraform withdrew 150 million UST from the Curve liquidity pool. The collapse of the TerraUSD (UST) stablecoin and Luna token occurred in 2022 and erased roughly $40 billion in value within days.

Terraform Labs was founded in 2018. The firm filed for bankruptcy in January 2024, following the 2022 downfall that rippled across the crypto sector. CoinDesk reported that the court's decision on Jane Street’s motion could shape how responsibility for that collapse is assigned.

Do Kwon pleaded guilty to conspiracy and wire fraud. He received a 15-year prison sentence. A jury found Do Kwon and Terraform Labs liable for securities fraud. Do Kwon stated he was alone responsible for everyone’s pain.

Jane Street denies using insider information or having any role in the 2022 Terra collapse. The defendants wrote that the 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.

Jane Street maintains that Terraform’s fraud scheme has already been prosecuted, adjudicated, and punished, with no involvement by Jane Street.

The trading firm said the lawsuit rehashes events already settled in court and seeks damages for losses caused by internal misconduct. CoinDesk reported that Jane Street argued the core issues behind Terra’s collapse have already been settled through criminal and civil cases against Do Kwon.