Jane Street seeks exit from Terra fallout as estate probes trading play

Quant firm Jane Street has asked a New York court to dismiss Terraform Labs’ insider-trading suit (filed by the bankruptcy estate) that alleges the firm used private information to withdraw funds before the May 2022 Terra/LUNA collapse. The estate also revived an internet theory that Jane Street sold Bitcoin daily at 10 AM — allegedly using a $790 million stake in BlackRock’s IBIT to profit — but on-chain analysts and economists have pushed back, calling the theory flawed and commonplace arbitrage explanations normal. Jane Street’s filing cites the Wagoner rule and jurisdictional defenses and calls the suit a cash grab. Market impact: the case raises reputational and regulatory risk for sophisticated trading desks and could spur scrutiny of large crypto positions and disclosure rules, but analysts argue there is no clear evidence of market manipulation, suggesting limited immediate price pressure on Bitcoin.