Jane Street was supposedly dumping large amounts of Bitcoin at around 10am during the crash of Bitcoin over the last few months, and connected to Blackrock’s ETF. They were dumping the price and buying back later, probably executing short positions to profit from the lower price, and likely part of a conspiracy to drop Bitcoin’s price to drive investment elsewhere and slow adoption wiping out new adopters… But since the lawsuit, this behavior has stopped, but the article highlights that this banking organization is unethical and abusing the system, and barred from India’s markets along with some profits being confiscated. And worth mentioning, when the bankers opened their Bitcoin ETF funds creating paper Bitcoin, this gave them leverage to game the system more than just large holders trading to wipe out those using leverage. The interesting bit as the banking house of cards is going to get blown down, where will Bitcoin’s price end up once they lose control. And is this why so many are running so many schemes to get a hold of as much Bitcoin as possible in self-custody? And a lot of the big banking firms are working on custodial systems for crypto trading, as they can play games with the amounts when they hold it, e.g. overselling while mining it to cover the difference, kind of mimicking the fractional reserve banking system they use to create currency out of thin air…
By Boaz Sobrado,
Within days of being sued over the $40 billion Terra collapse, Jane Street Capital was rumoured to scrub every post from its X account. The rumours turned out to be false: the page has never posted in the past. Nevertheless, crypto market participants are on edge as the firm, which generated $20.5 billion in net trading revenue last year and handles roughly 10% of all U.S. equity trades, now faces allegations of insider trading in crypto markets. It’s not the first time the quantitative trading firm has been accused of exploiting privileged access to extract outsize profits.
The federal lawsuit, filed February 23 in the Southern District of New York, alleges that Jane Street used inside information from Terraform Labs to avoid more than $200 million in losses before the Terra/Luna ecosystem imploded in May 2022. Jane Street has called the suit “desperate” and a “transparent attempt to extract money.” But the allegations land differently when read alongside a 105-page enforcement order that India’s Securities and Exchange Board published last July, documenting what SEBI described as a strikingly similar strategy on the other side of the world.
‘Bro We All Know Who The Buyer Is’
The complaint, brought by Todd Snyder, the plan administrator overseeing Terraform’s bankruptcy wind-down, names Jane Street Group, Jane Street Capital, co-founder Robert Granieri, and two employees: Bryce Pratt and Michael Huang. The filing describes a pipeline for material nonpublic information running from Terraform’s engineering team directly into Jane Street’s trading desk.
Pratt, according to the complaint, interned at Terraform Labs during the summer of 2021 and joined Jane Street that September. By February 2022, he had set up a group chat called “Bryce’s Secret” that included a Terraform software engineer and members of Terraform’s business development team. In one exchange cited in the filing, the Terraform engineer wrote: “bro we all know who the buyer is. its where u work… Jane Streeeeeeeet.”
When asked about the legality of what Jane Street was doing with the information, Pratt allegedly responded: “everything. Probably ya. If jump can legally do smtg we probs can too.”
The complaint’s central allegation concerns May 7, 2022. That day, Terraform withdrew 150 million UST from Curve3pool, a decentralized exchange, as part of a liquidity migration that had not been publicly announced. Within 10 minutes, a wallet linked to Jane Street pulled 85 million UST from the same pool, the largest single swap the platform had ever processed. The combined withdrawal destabilized UST’s liquidity. Within a week, the Terra Luna ecosystem had collapsed, wiping out roughly $40 billion in value.
According to the complaint, this trade “would have been impossible without inside information.” Jane Street’s response: the losses were caused by the “multibillion-dollar fraud perpetrated by the management of Terraform Labs.” Terraform founder Do Kwon was sentenced to 15 years in prison in December 2025 for wire fraud and conspiracy. A companion $4 billion lawsuit filed in December 2025 accuses Jump Trading of a separate arrangement: a secret deal to buy Luna at $0.40 when the market price was $110.
The complaint is heavily redacted. Specific profit figures, internal communications, and details of Jane Street’s trading strategy remain under seal. The case includes 13 counts spanning insider trading, securities fraud, Commodity Exchange Act violations, unjust enrichment, and breach of confidence.
The India Playbook
The Terraform allegations are unproven. But in India, regulators have already reached their own conclusions about Jane Street’s trading practices.
In early July 2025, SEBI issued an interim order against four Jane Street entities (JSI Investments, JSI2 Investments, Jane Street Singapore, and Jane Street Asia Trading), barring them from Indian securities markets. The 105-page order accused Jane Street of manipulating the BANKNIFTY and NIFTY 50 indices across 18 derivative expiry days between January 2023 and March 2025. SEBI calculated total profits of 36,502 crore rupees, roughly $4.3 billion.
The regulator described a two-phase strategy it called an “expiry day trap.” In the morning session, Jane Street’s entities would aggressively buy index stocks and futures, often accounting for more than 20% of market volume in individual securities. This pushed the index higher. In the afternoon, they reversed course, dumping their positions. The index fell back. Short options positions built during the morning phase became profitable on the decline. In a single day — January 17, 2024 — the strategy allegedly generated 735 crore rupees, according to the order.
SEBI described the trades as “sharp, large and aggressive,” creating “a false or misleading appearance of market activity.” When India’s National Stock Exchange issued a written warning in February 2025, telling Jane Street to stop, the firm acknowledged the letter but continued the same practices. SEBI called this “egregious behaviour, in clear disregard/defiance of the explicit advisory.”
Jane Street dismissed the SEBI probe as “biased” and “pre-determined.” It appealed to India’s Securities Appellate Tribunal. That hearing was adjourned on February 25, 2026, the same week the Terraform lawsuit was filed in New York. SEBI impounded 4,843.57 crore rupees, approximately $566 million, in alleged unlawful gains.
A Shared Structure
The legal theories differ. The Terraform case alleges insider trading through misappropriation of confidential information. The SEBI order describes market manipulation through trading patterns. But both describe a similar structural logic: use a privileged position to move one market, then harvest profits in the derivative layer sitting on top.
In India, according to SEBI’s account, Jane Street pumped index stocks to profit from short options positions. In crypto, the complaint states that Jane Street used inside knowledge of Terraform’s liquidity withdrawal to unwind its exposure before the collapse hit. In both cases, the allegations center on an information or access advantage that ordinary market participants did not have.
That structural similarity takes on added weight given Jane Street’s current role in crypto markets. The firm was one of the original four authorized participants for BlackRock’s iShares Bitcoin Trust, or IBIT, the largest spot Bitcoin ETF, and remains one of four approved for in-kind creation and redemption of shares. Its most recent 13F filing showed roughly $790 million in IBIT shares as of the fourth quarter of 2025. But as former hedge fund manager Michael Green has noted, that position “is almost entirely offset by undisclosed options and futures positions.” Former prop trader Ryan Scott was more blunt: “Anyone posting this as bullish is committing a capital offense.”
Current 13F disclosure rules require reporting long equity positions but not futures, swaps, or most over-the-counter derivatives. Jane Street’s actual net exposure to Bitcoin (whether long, flat, or short) is unknown. The SEC has proposed expanding beneficial ownership definitions to include cash-settled derivatives, but the rule remains unimplemented.
What Comes Next
Both cases are in early stages. Snyder filed the Terraform suit days ago. The SEBI appeal sits in adjournment. Jane Street denies all claims in both jurisdictions.
But the firm now faces scrutiny on two continents, with regulators and plaintiffs describing variations of the same concern: that a trading operation built on speed and information advantages may have crossed lines that the current disclosure framework was not designed to police. For a firm that serves as gatekeeper to the largest Bitcoin ETF and moves billions through crypto markets annually, the question isn’t just legal liability. It’s whether the infrastructure around digital assets has matured enough to keep up with the firms operating inside it.