Jane Street has asked the U.S. District Court for the Southern District of New York to throw out, with prejudice, the insider trading lawsuit brought by Terraform’s bankruptcy administrator Todd Snyder. In its April 24, 2026 filing, the firm said the case attempts to make an innocent third party pay for Terraform’s own fraud, and pointed to Do Kwon’s 15-year federal prison sentence as the central reason the claims should fail.
Criminal liability for the Terra collapse is already established
One of Jane Street’s main arguments is that the legal responsibility for the Terra collapse has already been determined. According to the motion, Do Kwon pleaded guilty to conspiracy and wire fraud, and the court has already tied the May 2022 UST depeg, LUNA’s collapse, and roughly $40 billion in wiped-out market value to fraud inside Terraform rather than trading decisions made by outside market participants.
Jane Street said Terraform is now trying to extract money from it for losses caused by Terraform’s own conduct in the market. That argument sits at the center of the firm’s push for a permanent dismissal.
The complaint’s own timeline cuts against the insider-trading claim
Jane Street also attacked the timeline laid out in Terraform’s complaint. Terraform alleged that Jane Street received material non-public information and sold TerraUSD before the broader market knew what was happening. Jane Street answered that Terraform’s own pleading places the largest UST sale 10 minutes after the allegedly confidential information had already become public.
That timing matters. If the information was already public by then, Jane Street argues, the trade cannot support an insider-trading theory built on early access to undisclosed information. The firm added that investors could already see public signs of a breakdown and that it simply sold a deteriorating position as conditions worsened.
No documented support for alleged back-channel contacts
Another part of Terraform’s case claims Jane Street learned, through back-channel communications, when Terraform would switch to a new liquidity pool and traded around that event. Jane Street said the allegation is unsupported. Even after broad pre-suit discovery, Terraform still failed to identify any communication showing that timing was conveyed to Jane Street.
The company also invoked the bankruptcy-law Wagoner rule, arguing that a bankruptcy trustee cannot sue third parties to recover for losses caused by the debtor company’s own fraud. Jane Street said that doctrine is another reason the complaint should be dismissed outright.
Jane Street is not the only market maker Terraform has sued
The lawsuit is part of a broader litigation push by Terraform’s estate. In February 2026, Todd Snyder sued Jane Street along with co-founder Robert Granieri and employees Bryce Pratt and Michael Huang, alleging they traded Terra tokens after receiving non-public information from Terraform insiders.
Jump Trading has faced a similar case. Terraform has sought as much as $4 billion from Jump, accusing it of suspicious trading tied to the Terra collapse. Jump responded by arguing that Terraform was trying to shift responsibility for its own fraud through civil litigation.