Jane Street scandal exposed

This powerful trading firm, which you may have never heard of, has been caught red-handed. And twice, on two different continents. This is precisely why Bitcoin has finally gained its freedom. Let me explain: Jane Street Group is a New York-based quantitative trading firm. They don't have a CEO. According to their own description, they operate like an "anarchist commune." In the first nine months of 2025 alone, their net trading revenue reached $24 billion, surpassing their total revenue of $20.5 billion for the entire year of 2024. In the second quarter of 2025 alone, their revenue reached $10.1 billion, the highest quarterly trading revenue ever recorded by any Wall Street firm. From any perspective, they are the most profitable trading firm in the world. This week, the bankruptcy administrator of Terraform Labs filed a lawsuit in Manhattan federal court, accusing Jane Street of using insider information to manipulate the Terra Luna crash in May 2022. This crash wiped out $40 billion in market capitalization and triggered a chain reaction, ultimately leading to the collapse of companies such as Celsius, Three Arrows Capital, and FTX. The accusation is shockingly simple. On May 7, 2022, Terraform Labs quietly withdrew $150 million worth of UST from Curve3pool, a large decentralized liquidity pool. There was no public announcement; the liquidity was withdrawn silently. Ten minutes later, a wallet associated with Jane Street withdrew $85 million from the same liquidity pool. Just ten minutes later. The lawsuit alleges that former Terraform intern Bryce Pratt (who joined Jane Street as a full-time employee in September 2021) established secret contacts with his former colleagues at Terraform. He allegedly passed significant, non-public information regarding changes in Terraform liquidity directly to Jane Street's trading department. The lawsuit names four defendants: Jane Street Group LLC, co-founder Robert Granieri, and employees Bryce Pratt and Michael Huang. The administrator's statement hits the nail on the head: Jane Street conducted "trades that would have been impossible without its unique insider information." Worse still, the lawsuit claims Jane Street's withdrawal triggered the decoupling from UST, causing the entire Terraform ecosystem to collapse. LUNA's price plummeted from over $80 to near zero, wiping out $40 billion. Ordinary people suffered devastating losses; retirement savings, children's education funds, and life's work vanished in just a few days. What was Jane Street's response? They called it "desperate" and "baseless." But the problem is: this wasn't the first time they'd done something like this. In July 2025, the Securities and Exchange Commission of India (SEBI) filed one of the most serious market manipulation charges against Jane Street in the country's history. The SEBI investigation found that Jane Street had engaged in textbook pump-and-dump operations on the Bank Nifty index across 18 derivative maturities between January 2023 and March 2025.

Their methods were highly mechanical:

In the morning: Jane Street's algorithm heavily bought the constituent stocks of the bank stock index and their futures, pushing the index up by 1% to 1.3%. SEBI found that on some trading days, Jane Street alone had the entire impact on the index's rise.

At the same time, they bought a large number of short options, mainly selling call options and buying put options, in a ratio severely imbalanced with their stock holdings. SEBI found that, calculated by delta, option holdings were 7.3 times that of stock and futures holdings. This is not hedging or arbitrage, but rather directional manipulation with additional steps.

Afternoon: They reversed their actions, selling all the stocks they had bought in the morning. The index fell, and the short options profited. This operation was repeated every expiry date. The Securities and Exchange Commission of India (SEBI) assessed that the illegal profits amounted to 48.43 billion rupees, approximately $580 million. The SEBI called Jane Street's actions "a means of deliberately manipulating settlement prices." They noted that Jane Street continued this strategy even after the National Stock Exchange of India (NSE) issued a clear warning in February 2025. The SEBI's wording was unusually harsh for the regulator: "The integrity of the market, and the trust of millions of small investors and traders, can no longer be held hostage by such untrustworthy manipulators." Jane Street was subsequently banned from the Indian securities market. They deposited over $560 million into a third-party escrow account and immediately filed an appeal. As of now, the case is still being heard in the Indian Securities Appeals Court. Now let's talk about Bitcoin. Since November 2025, Bitcoin traders have noticed some strange phenomena. Every morning around 10 AM (Eastern Time), when the US stock market opens, the selling volume of Bitcoin and its related ETFs increases significantly. This pattern is unusually stable. Bitcoin surges overnight during Asian and European trading sessions, then immediately plummets after the New York Stock Exchange opens. (For details, please refer to Trading View's analysis and statistics)

These numbers are significant. The chart from December 2025 shows that on some days, the price of Bitcoin plummeted from $89,700 to $87,700 within minutes, resulting in losses of up to $171 million for leveraged long positions before recovering. This occurred repeatedly on December 1st, 5th, 8th, 10th, 12th, 15th, and in January and February 2026.