TLDR
- Jane Street asked a Manhattan court to dismiss Terraform Labs’ insider trading lawsuit.
- Terraform’s administrator sued Jane Street and three people in February 2026.
- Jane Street denied using nonpublic information before Terra’s May 2022 collapse.
- Terraform alleged Jane Street avoided more than $200 million in losses.
- Jane Street asked for dismissal with prejudice, blocking the same lawsuit again
Jane Street has asked a US court to dismiss Terraform Labs’ insider trading lawsuit. The firm denied claims that it used nonpublic information before Terra’s collapse. The case centers on trading activity before TerraUSD lost its dollar peg in May 2022.
Jane Street seeks dismissal of Terraform lawsuit
Jane Street filed its motion in a Manhattan federal court on Thursday. The trading firm asked the judge to dismiss the lawsuit with prejudice. That would stop Terraform from bringing the same claims again.
Terraform’s court-appointed administrator, Todd Snyder, filed the lawsuit in February 2026. The complaint named Jane Street, co-founder Robert Granieri, and employees Bryce Pratt and Michael Huang.
Terraform claimed Jane Street traded Terra tokens after receiving nonpublic information from Terraform insiders. It also claimed the firm used that information to protect its positions.
However, Jane Street rejected the claims in its court filing. It said Terraform’s case tried to shift blame for its own collapse.
Firm denies insider trading claims
Jane Street argued that Terraform’s fraud caused the losses. It said the case tried “to extract cash from Jane Street” for damage Terraform caused.
The firm also said Terraform had already faced legal findings over the collapse. It noted that founder Do Kwon pleaded guilty to conspiracy and wire fraud charges.
Jane Street said investors saw public signs of Terra’s failure. It argued that it sold a weakening asset as the market was already falling.
The firm also challenged Terraform’s insider trading theory. It said Terraform’s complaint showed a major TerraUSD sale came after the information became public.
Terra collapse remains central to dispute
Terraform collapsed in May 2022 after TerraUSD lost its dollar peg. The fall also pushed LUNA lower and wiped out about $40 billion in value.
The lawsuit cited a May 7, 2022, liquidity pool event. Terraform allegedly withdrew $150 million from a pool before public notice.
Terraform claimed a Jane Street-linked wallet then withdrew $85 million in TerraUSD. It alleged the move helped trigger panic selling across the ecosystem.
Jane Street denied that it received hidden information about the liquidity pool change. It said Terraform failed to identify any clear communication showing that claim.
Legal arguments now move to court review
Jane Street also challenged the court’s jurisdiction in the case. It said Terraform did not show that the trades happened in the United States.
The firm also cited the Wagoner Rule in its motion. It argued that Terraform cannot recover losses tied to its own conduct.
Terraform’s administrator claims Jane Street engaged in insider trading and market manipulation. Jane Street says the complaint does not support those claims.
The court will now review whether the lawsuit can move forward. For now, Jane Street wants the case dismissed and closed permanently.
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