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Terraform Labs files lawsuit accusing Jane Street of triggering Terra collapse.
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Court filing alleges insider leak before $150 million UST liquidity withdrawal, add panic.
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Questions grow over whether Do Kwon was fully responsible for crash, or will he receive pardon.
Terra Classic (LUNC), which collapsed in May 2022 after its stablecoin UST lost its dollar peg, is back in the spotlight. This comes after Terraform Labs filed a lawsuit against Jane Street, claiming the firm used insider information to profit and may have accelerated the fall of TerraUSD (UST).
Now, Terra supporters are asking a big question: if Jane Street is proven responsible for the 2022 crash, could LUNC surge 100X from here?
Terraform Labs Filed Lawsuits Against Jane Street
On February 23, 2026, the bankruptcy administrator of Terraform Labs filed a lawsuit in Manhattan federal court against Jane Street. However, the complaint alleges that the firm used insider information before TerraUSD (UST) lost its peg in May 2022.
According to court filings, a former Terraform intern who later joined Jane Street allegedly shared private details about a planned $150 million UST withdrawal from Curve.
The lawsuit claims Jane Street sold large amounts of UST minutes after the withdrawal, which may have worsened panic and accelerated the collapse.
In response to these claims, Jane Street has denied all allegations, calling them baseless and blaming Terraform’s flawed design for the meltdown.
Is Do Kwon Not Guilty? Will He Be Pardoned!
The lawsuit has reopened debate about Terraform Labs co-founder Do Kwon. Some LUNC members say that if outside manipulation is proven, the crash may not have been only an internal failure.
However, legal experts say it is hard to prove market manipulation.
Even if Jane Street is found guilty, it does not automatically remove Do Kwon’s responsibility. Courts would still review Terraform’s stablecoin design and risk controls.
Speculation about a possible pardon for Do Kwon has already started online. Recently, President Trump pardoned Changpeng “CZ” Zhao, the founder of Binance, after he pleaded guilty & paid a fine of $4.3 billion.
Similarly, Trump also granted a full pardon to Ross Ulbricht, the creator of the Silk Road marketplace.
Could LUNC Rise 100X if Jane Street Is Proven Responsible for the Crash?
As of now Lunc is trading around $0.0000425; a 100X move would push the LUNC price close to $0.00425.
While such a surge is possible in crypto, but it would require strong investor confidence and major supply burns.
