Jane Street Exposed

The most powerful trading company you’ve never heard of just got caught sneaking around. Twice. On two different continents. And thanks to that, Bitcoin has finally been set free.
Jane Street Group is a quantitative trading firm based in New York. They don’t have a CEO. According to their own description, they operate as an “anarchic community.” They generated $24 billion in net trading revenue in just the first nine months of 2025, surpassing their total revenue for 2024 of $20.5 billion. In Q2 2025 alone, their trading revenue hit $10.1 billion, the highest quarterly trading revenue ever achieved by any company on Wall Street.
In every way, this is the most profitable trading activity in the world.
And this week, the bankruptcy manager of Terraform Labs filed a lawsuit in Manhattan federal court, accusing Jane Street of using insider information to front-run the collapse of Terra Luna in May 2022—a collapse that wiped out $40 billion in value and triggered a chain reaction leading to the downfall of Celsius, Three Arrows Capital, and FTX.

This accusation is astonishing in its simplicity.
On May 7, 2022, Terraform Labs quietly withdrew $150 million USD from Curve3pool, a large decentralized liquidity pool. No public announcement was made. Just a stealth liquidity withdrawal.
Ten minutes later, a wallet linked to Jane Street withdrew $85 million from the same pool.
The lawsuit alleges that a former Terraform intern named Bryce Pratt, who joined Jane Street as a full-time employee in September 2021, established secret channels with his former colleagues at Terraform. He is accused of transferring critical insider information about Terraform’s liquidity moves directly to Jane Street’s trading desk.

The complaint names four defendants: Jane Street Group LLC, co-founder Robert Granieri, and employees Bryce Pratt and Michael Huang.
The plaintiff straightforwardly states: Jane Street engaged in “transactions that would not have been possible without the insider information they had exclusive access to.”
And things get worse. The lawsuit claims that Jane Street’s withdrawals contributed to the de-pegging of UST, plunging Terraform’s entire ecosystem into a death spiral. LUNA dropped from over $80 to nearly zero. $40 billion vanished. Ordinary people lost everything—retirement savings, college funds, a lifetime of work—all gone within days.
Jane Street’s response? They call it “desperate” and “baseless.”
But the problem is: this isn’t the first time they’ve done this.
In July 2025, India’s Securities and Exchange Board (SEBI) issued one of the largest market manipulation allegations in the country’s history. SEBI’s investigation found that over 18 days of derivative contract expirations from January 2023 to March 2025, Jane Street engaged in classic pump-and-dump stock manipulation of the Bank Nifty index.

The tactics were robotic:
That morning, Jane Street’s algorithms aggressively bought stocks and futures constituting the Bank Nifty index, pushing it up by 1% to 1.3%. On some days, SEBI found that Jane Street alone caused the entire positive price impact on the index.
Simultaneously, they heavily bought put options—mainly selling calls and buying puts—with positions disproportionately large relative to their stock holdings. SEBI discovered that their options positions exceeded their delta-equivalent exposure to stocks and futures by over 7.3 times. This wasn’t hedging. It wasn’t arbitrage. It was market manipulation in a very targeted, multi-step process.
In the afternoon, they reversed the process: selling all the stocks bought in the morning, causing the index to fall. The put options were activated. They repeated this cycle every expiration day.
SEBI estimates illicit profits of up to 4843 crore rupees, about $580 million USD. They described Jane Street’s behavior as “a deliberately designed scheme to manipulate settlement prices.” They noted that Jane Street continued this strategy even after the National Stock Exchange (NSE) issued a clear warning in February 2025.

SEBI’s language was unusually harsh for a regulatory body: “The integrity of the market and the trust of millions of investors and retail traders cannot continue to be compromised by the schemes of such an untrustworthy entity.”
Jane Street was banned from trading on the Indian stock exchanges. They deposited over $560 million into escrow accounts and immediately appealed. The case is still pending before the Indian Securities Appellate Tribunal.

Since November 2025, Bitcoin traders have noticed something strange. Every morning around 10:00 AM Eastern, right as the US stock market opens, large sell volumes flood into BTC and related ETFs. The pattern repeats eerily: Bitcoin surges overnight during Asian and European trading sessions, then plunges sharply as the New York market wakes up.

The numbers are striking. Charts from December 2025 show BTC dropping from $89,700 to $87,700 in just a few minutes on several days, wiping out $171 million in leveraged positions before rebounding. This happened on December 1, 5, 8, 10, 12, 15, and repeatedly through January and February 2026.

The crypto Twitter community calls it the “10 AM dump.”
The criticism is entirely focused on Jane Street—and for good reason. Jane Street is one of four authorized participants (APs) for BlackRock’s IBIT, the world’s largest spot Bitcoin ETF. The other three are Virtu Americas, JP Morgan Securities, and Marex. As an AP, Jane Street has a unique ability to create and redeem ETF shares, meaning they are directly connected to the channels moving Bitcoin in and out of institutional investment funds.

Their 13F filings confirm enormous holdings. As of Q3 2025, Jane Street held $5.7 billion worth of IBIT shares. They bought an additional $276 million in Q4 2025, bringing their total to over 20 million shares worth about $790 million at year-end prices. At their peak, they owned nearly $2.5 billion in IBIT stock.

What’s suspicious is that, while accused of dumping spot BTC every morning, Jane Street simultaneously increased their MSTR (formerly MicroStrategy) holdings by 473% in Q4 2025, accumulating 951,187 shares worth about $121 million. Meanwhile, major funds like BlackRock and Vanguard were liquidating billions of dollars in MSTR.
Think about this: selling BTC at market open to crash the price, liquidate leveraged positions, then buy back at a lower price. Meanwhile, they’re accumulating the most highly leveraged alternative asset to Bitcoin on the market, preparing for an inevitable rebound.
Glassnode co-founders Jan Happel and Yann Allemann revived this hypothesis via their Negentropic account on X, linking algorithmic trading patterns to the Terraform lawsuit. The Milk Road account amplified this, describing “persistent rumors” that organizational trading desks are using a “very specific/murky strategy.”

Then the lawsuit was withdrawn. And something notable happened.
And now, after Terraform’s lawsuit against Jane Street was filed, the 10 AM dump… did not happen. For the first time in months, Bitcoin did not plunge at market open. Instead, it surged.

Today, February 25, 2026, Bitcoin soared over 3%, breaking multiple resistance levels to trade above $68,000 after threatening to fall below $60,000 just days earlier. Over $323 million in short positions were liquidated. The Stochastic RSI hit 100. The ETF inflows reached $257.7 million in a single day—the highest since early February.
The pattern has been broken.
Now, I want to be clear: correlation is not causation. Many factors are at play: Trump’s State of the Union speech, oversold technical conditions, short squeeze buying. The Fear & Greed Index is at 11—extreme fear, often a reversal indicator. The RSI has dropped to 15.80—the lowest since the COVID crash of 2020, before a 1400% rally. But at this moment, it’s hard to ignore.
There are rumors on X that Jane Street has “been forced to halt trading algorithms” after the lawsuit. Jane Street told Cointelegraph these are “baseless, opportunistic accusations.” Whether they are forced to stop or voluntarily pause for legal reasons, the result is the same: selling pressure has eased significantly.

What does this really mean for Bitcoin?
Spot Bitcoin ETFs are expected to level the playing field. They offer institutional access, are tightly regulated, and are endorsed by BlackRock. They’ve been hugely successful—IBIT alone has attracted over $20 billion since launch.
But the ETF structure introduces something Bitcoin was designed to avoid: trusted intermediaries with privileged access to the system.
When the SEC approved spot Bitcoin ETFs in January 2024, they mandated that creation and redemption could only be done with cash. Whenever new shares are created or redeemed, someone must buy or sell actual Bitcoin. The authorized participants involved in this process have a structural advantage over other market participants.
In September 2025, the SEC approved in-kind creation and redemption for IBIT, meaning APs can now exchange Bitcoin directly for ETF shares without needing fiat. This further empowered Jane Street, Virtu, JP Morgan, and Marex to control the flow of Bitcoin into and out of the largest institutional fund system.

Essentially, the sharp drop at 10 AM is a symptom of the same disease that has plagued the gold market for decades.
I wrote about this in “The Endgame in the Gold Market”: paper trades competing with paper trades, where the most connected institutions can manipulate prices before the rest of the market realizes what’s happening.
JPMorgan traders Gregg Smith and Michael Nowak were convicted of gold futures market manipulation—an eight-year scheme involving thousands of illegal trades. JPM paid $920 million to settle. Deutsche Bank paid $30 million for the same case. UBS, HSBC, and six other traders faced charges of violating CFTC anti-manipulation rules.
The same strategy. Different assets.
And always, the companies call it “market making,” “arbitrage,” “hedging.” These euphemisms keep flowing. The result is always the same: ordinary people suffer heavy losses while insiders profit immensely.

So, how do we move forward?
Overall, the big picture remains unchanged. The $4.5 billion outflow from ETFs in the first eight weeks of 2026 looks ominous, but Strategy (Saylor’s firm) just bought $39 million worth of BTC, accounting for 99% of all corporate purchases during this period. The giants are not selling. They’re waiting for the algorithms to do their work.

And perhaps, just perhaps, the algorithms have finished.
If Jane Street is forced to withdraw from their alleged daily selling program due to legal risks, regulatory scrutiny across multiple continents, or simply to protect themselves, it would remove a persistent structural obstacle that has weighed on Bitcoin for the past four months.
Bitcoin was created precisely for this moment—a monetary system that doesn’t rely on trusted intermediaries. A system that doesn’t need authorized participants. A system that cannot be manipulated by an underground channel of a former intern.
But don’t forget what brought us here. It’s the very companies that claim to “market make” and “provide liquidity” that are accused of trading ahead of market crashes, manipulating national stock indices, and executing semi-automatic daily programs on the very assets their ETFs are supposed to track.
This is the system Bitcoin was designed to replace.