Jane Street: Inside the Trading Giant at the Center of Crypto’s Latest Controversy

A firm few retail investors recognize has suddenly become one of the most discussed names in global markets.

Jane Street does not run advertising campaigns. Its leadership rarely appears in interviews. It famously avoids traditional corporate hierarchy. Yet in early 2026, it found itself at the center of lawsuits, regulatory scrutiny, and intense debate within Bitcoin markets.

Here’s what’s known — and why it matters.

Who Is Jane Street?

Founded in New York, Jane Street is a quantitative trading powerhouse specializing in high-frequency strategies across equities, ETFs, bonds, and derivatives.

The scale of its operations is enormous:

$24 billion in trading revenue in the first nine months of 2025

$10.1 billion in a single quarter (April–June 2025)

Roughly $2 trillion in monthly equity trading volume

Approximately 41% of U.S. bond ETF trading activity

By any metric, Jane Street is one of the most influential liquidity providers in modern markets.

When firms of this size adjust positioning, markets notice.

The Terra Luna Lawsuit

The latest controversy traces back to the collapse of Terra (LUNA) in May 2022 — a collapse that erased roughly $40 billion in value and triggered cascading failures across the crypto industry.

The fallout contributed to the unraveling of firms such as:

Celsius Network

Three Arrows Capital

FTX

A lawsuit filed in Manhattan federal court alleges that Jane Street acted on non-public information related to liquidity movements by Terraform Labs shortly before the collapse accelerated.

According to the complaint:

Terraform Labs withdrew $150 million from a major liquidity pool.

Minutes later, a wallet allegedly linked to Jane Street withdrew $85 million from the same pool.

The suit claims insider knowledge may have been shared through former professional connections.

Jane Street has denied the allegations, calling them baseless and without merit.

The case is ongoing. No court has ruled on the claims.

Regulatory Action in India

Separate from the Terra-related lawsuit, India’s securities regulator — Securities and Exchange Board of India (SEBI) — brought market manipulation charges against Jane Street in 2025.

Regulators allege that between 2023 and 2025, the firm executed repeated index-option strategies involving the NIFTY Bank, commonly referred to as Bank Nifty.

According to SEBI:

Morning stock purchases allegedly pushed index levels higher.

Simultaneous derivatives positions were structured to benefit from afternoon declines.

Regulators estimate approximately $580 million in improper gains.

Jane Street has appealed the decision and disputes the characterization of its trading activity.

The firm was temporarily restricted from Indian markets pending the outcome.

The “10 AM” Bitcoin Pattern

Beginning in late 2025, traders began noting a recurring pattern in Bitcoin price action around the U.S. equity market open (10 AM Eastern).

On multiple occasions, Bitcoin experienced sharp, short-term declines at that hour before recovering later in the session. Social media labeled the phenomenon the “10 AM slam.”

Speculation intensified because Jane Street is one of the Authorized Participants (APs) for BlackRock’s spot Bitcoin ETF, iShares Bitcoin Trust.

Authorized Participants play a key structural role in ETF markets:

They create and redeem ETF shares.

They facilitate liquidity between the ETF and underlying assets.

They can transact directly in large blocks.

Public filings showed Jane Street holding significant IBIT exposure and expanding positions in Strategy, a firm widely known for its substantial Bitcoin treasury.

Some market participants theorized that ETF mechanics could influence intraday liquidity patterns.

Jane Street has denied wrongdoing, and there is no regulatory finding linking the firm to systematic Bitcoin price suppression.

Notably, after news of the Terraform lawsuit surfaced in February 2026, Bitcoin posted one of its strongest daily moves in months, fueling speculation that trading flows had shifted. Correlation, however, does not establish causation.

The Structural Debate Around Bitcoin ETFs

The controversy has reignited discussion about ETF market structure.

When spot Bitcoin ETFs launched in January 2024, they were widely viewed as a breakthrough for institutional access. Billions of dollars flowed into products like IBIT within months.

However, ETFs rely on a small group of large financial institutions to function. Authorized Participants often include major banks and trading firms such as:

JPMorgan Chase

Goldman Sachs

Citadel Securities

Virtu Financial

UBS

Some analysts argue that the ETF framework introduces intermediaries into a system originally designed to eliminate gatekeepers.

Others counter that ETFs operate under established regulatory rules and enhance transparency by bringing Bitcoin into traditional capital markets.

The key structural concern raised by critics is not necessarily explicit suppression — but opacity. Much of the arbitrage and inventory management conducted by APs occurs out of public view, making intent difficult to assess.

The Bigger Picture for Bitcoin

While controversy surrounds specific trading firms, broader adoption trends continue:

Public companies continue accumulating Bitcoin reserves.

Institutional flows remain significant.

Sovereign-level interest persists.

For example, Strategy (formerly MicroStrategy) added another $39 million in Bitcoin during early 2026.

The long-term investment thesis for Bitcoin — decentralized supply, predictable issuance, and sovereign self-custody — remains independent of any single intermediary or ETF structure.

What Comes Next?

Several parallel processes are unfolding:

The Terraform lawsuit is in early litigation stages.

The SEBI case remains under appeal.

Market participants continue analyzing ETF flow data and intraday liquidity patterns.

Jane Street, historically media-averse, is now facing unprecedented public scrutiny.

Whether courts or regulators ultimately confirm or dismiss the allegations, one development is clear:

Bitcoin’s integration into traditional finance has introduced it to the same high-powered trading firms that dominate equities and fixed income markets.

That intersection — decentralized money meeting centralized market structure — may define the next phase of Bitcoin’s evolution.

The legal outcomes are still uncertain.

The structural debate is just beginning.