Jane Street asks Manhattan court to dismiss Terraform insider trading lawsuit

Trading firm Jane Street filed a motion to dismiss in Manhattan federal court on Thursday, seeking to throw out an insider-trading lawsuit brought by Terraform Labs’ bankruptcy administrator. It also asked the court to close the case with prejudice, barring Terraform from filing the same lawsuit again. In its motion, Jane Street argued that the Terraform fraud scheme had already been tried in court and punished, and that the complaint is internally inconsistent.

The core arguments in Jane Street’s motion to dismiss

According to the motion papers Jane Street filed with the Manhattan federal court, Jane Street’s core defense position includes three points:

Jane Street argues that its trading of Terra-related tokens was based on public market signals, not inside information: investors “saw the public signs of a market meltdown” and decided to “sell an investment that was deteriorating right as the market was obviously collapsing.”

The motion points out that Terraform’s complaint is internally inconsistent: the complaint itself states that Jane Street’s largest TerraUSD trade occurred “10 minutes after the so-called significant non-public information was made public.”

The motion says Terraform failed to identify any material non-public information Jane Street received during the alleged sale of the tokens: the motion cites: “The plaintiff ‘alleges, based on information and belief,’ that Jane Street learned the timing of Terraform’s transition to a new liquidity pool through ‘informal channels,’ but despite extensive pre-suit investigation, it has not found any record of communications disclosing that timing.”

The bankruptcy administrator’s allegations against Terraform

According to publicly available court records, Terraform Labs’ court-appointed administrator Todd Snyder filed a lawsuit against Jane Street, company co-founder Robert Granieri, and employees Bryce Pratt and Michael Huang in February 2026. The lawsuit alleges that the individuals traded Terra-related tokens after obtaining non-public information from “Terraform insiders.”

Jane Street invokes Do Kwon’s conviction and the background of the TerraUSD collapse

According to the motion Jane Street filed, Jane Street directly quoted in its filing: “Terraform now claims that it is a victim of Jane Street’s trading. But the problem with that story is that Terraform’s fraud scheme—one in which Jane Street did not participate—has already been charged, tried, and punished.”

In its motion, Jane Street noted that Terraform founder Do Kwon has admitted guilt for conspiracy and wire fraud and was sentenced to 15 years in prison.

According to public records, in May 2022 Terraform’s algorithmic stablecoin TerraUSD lost its peg to the U.S. dollar, triggering a collapse of the highly correlated LUNA token and wiping out approximately $40 billion in market value. Terraform Labs subsequently entered bankruptcy proceedings.

Frequently Asked Questions

When and which court did Jane Street file its motion to dismiss?

According to publicly available court records, Jane Street filed a motion to dismiss in Manhattan federal court on Thursday, seeking to dismiss the insider-trading lawsuit brought by Terraform administrator Todd Snyder with prejudice.

What are the specific allegations Terraform’s administrator made against Jane Street?

According to publicly available court records, Terraform Labs’ administrator Todd Snyder filed suit in February 2026, alleging that Jane Street and co-founders Robert Granieri, as well as employees Bryce Pratt and Michael Huang, traded Terra-related tokens after obtaining non-public information from “Terraform insiders.”

What was the outcome of Do Kwon’s ruling in the Terraform fraud case?

According to the motion papers Jane Street filed, Terraform founder Do Kwon pleaded guilty to conspiracy and wire fraud and was sentenced to 15 years in prison; Jane Street cited this conviction as one of the core arguments supporting its request to dismiss the lawsuit.