Author: Roberto Rios
Translation: Hedgehog, PANews
Jane Street Group is a quantitative trading firm headquartered in New York. They do not have a CEO and operate, in their own words, like an "anarchist commune."
The most powerful trading firm you've never heard of has just been caught with its hand in the "cookie jar" across two continents, and as a result, Bitcoin has finally seen freedom.
In the first nine months of 2025, they generated $24 billion in net trading revenue, surpassing the full-year revenue of $20.5 billion for 2024. In just the second quarter of 2025, they reached $10.1 billion, the highest quarterly trading revenue on Wall Street ever.
By any measure, they are the most profitable trading institution on the planet.
And just this week, the bankruptcy trustee of Terraform Labs filed a lawsuit in federal court in Manhattan, accusing Jane Street of using insider information to trade ahead of the May 2022 collapse of Terra Luna. That collapse evaporated $40 billion in market value and triggered a chain reaction that ultimately collapsed Celsius, Three Arrows Capital, and FTX.
The blunt nature of the accusation is jaw-dropping.
On May 7, 2022, Terraform Labs quietly withdrew $150 million worth of UST from Curve3pool (a major decentralized liquidity pool) without any public notice, simply pulling liquidity without a sound.
Ten minutes later, a wallet associated with Jane Street withdrew $85 million from the same pool.
A full ten minutes.
The lawsuit alleges that a former Terraform intern named Bryce Pratt, after joining Jane Street as a full-time employee in September 2021, established private communication channels with his former colleagues at Terraform. He allegedly passed significant non-public information about Terraform's liquidity operations directly to Jane Street's trading desk.
The complaint lists four defendants: Jane Street Group LLC, co-founder Robert Granieri, and employees Bryce Pratt and Michael Huang.
The trustee's statement is piercing: Jane Street's "trades would not have occurred without the exclusive insider information they obtained."
Worse still—the lawsuit also alleges that Jane Street's withdrawal helped trigger the depegging of UST, thus plunging the entire Terraform ecosystem into a death spiral. LUNA plummeted from over $80 to nearly zero, with $40 billion going up in smoke. Ordinary people lost everything—retirement savings, college funds, a lifetime of savings disappeared in days.
Jane Street's response? They called the allegations "desperate" and "baseless."
But the problem is: this is not their first time.
In July 2025, the Securities and Exchange Board of India (SEBI) launched one of the largest market manipulation charges in Indian history against Jane Street. The SEBI investigation found that on 18 derivatives expiry dates between January 2023 and March 2025, Jane Street engaged in textbook-style manipulation to increase and offload the Bank Nifty index.
The trading tactics were mechanical like clockwork:
Morning: Jane Street's algorithms actively bought Bank Nifty components and futures, pushing the index up by 1% to 1.3%. On certain days, SEBI found that Jane Street alone contributed all positive price impacts to the index. Meanwhile, they built up massive short option positions, primarily selling call options and buying put options, to a degree far exceeding the normal range of their equity positions. SEBI found that the delta-equivalent scale of the options position was 7.3 times that of the stock and futures positions. This was not hedging, not arbitrage, this is directional manipulation cloaked in additional steps.
Afternoon: Reverse operations. Sell all the stocks bought in the morning, causing the index to fall, profiting from the short options. This repeated with every expiry date.
SEBI's assessment: illegal profits of 4.843 billion rupees, about $580 million. They characterized Jane Street's behavior as "deliberately designed means of manipulation settlement prices," and noted that even after the Indian National Stock Exchange issued a clear warning announcement in February 2025, Jane Street continued the strategy.
SEBI's wording was unusually harsh: "The integrity of the market and the trust of millions of small investors and traders cannot be held hostage to the schemes of this unreliable actor."
Jane Street was banned from participating in the Indian securities market. They deposited over $560 million into a third-party escrow account and immediately filed an appeal. As of today, the case remains under review by the Indian Securities Appellate Tribunal.
Now, let's talk about Bitcoin.
Since November 2025, Bitcoin traders have noticed a peculiar phenomenon: every morning around 10 AM Eastern Time, right when the U.S. stock market opens, a large wave of selling hits BTC and related ETF stocks. This pattern is oddly consistent—Bitcoin rises during Asian and European trading hours and then gets slammed when New York wakes up.
See:
The numbers are staggering. Charts from December 2025 show that BTC dropped from $89,700 to $87,700 within minutes on certain days, liquidating $171 million in leveraged long positions, only to rebound again. This occurred repeatedly on December 1, 5, 8, 10, 12, 15, and throughout January and February.
Crypto Twitter dubbed it the "10 AM dump."
The spotlight is firmly on Jane Street, and for good reason. Jane Street is one of only four authorized participants in BlackRock IBIT (the world’s largest spot Bitcoin ETF), with the other three being Virtu Americas, JPMorgan Securities, and Marex. As an authorized participant, Jane Street has the unique ability to create and redeem ETF shares, meaning they have direct access to move Bitcoin in and out of institutional packaged products.
Their 13F filings confirm the massive positions. Jane Street held about $5.7 billion worth of IBIT in the third quarter of 2025 and added another $276 million in the fourth quarter, bringing their total holding to over 20 million shares, worth about $790 million at year-end. At their peak, they held nearly $2.5 billion in IBIT.
But what is questionable: at the same time Jane Street is allegedly dumping spot BTC every morning, they increased their MSTR (Strategy, formerly MicroStrategy) position by 473% in the fourth quarter of 2025, accumulating 951,187 shares worth about $121 million. Meanwhile, major funds like BlackRock and Vanguard have been massively reducing their MSTR holdings.
Think about it: selling BTC at market open, driving the price down, liquidating leveraged longs, then repurchasing at lower prices. At the same time, significantly buying into the highest-leveraged proxy assets for Bitcoin in the market, waiting for the inevitable rebound.
Glassnode co-founders Jan Happel and Yann Allemann reignited this theory through their X account Negentropic, linking algorithmic trading patterns with the filing of the Terraform lawsuit. The Milk Road account further amplified the influence, describing ongoing "very specific and shady trading tactics" related to institutional trading desks.
Then, after the lawsuit was filed, something extraordinary happened.
After the Terraform lawsuit was directed at Jane Street, that "10 AM dump"… disappeared. For the first time in months, Bitcoin did not crash at the U.S. market open but rather rose.
Today, February 25, 2026, Bitcoin surged over 3%, breaking through several resistance levels, trading above $68,000—just days before, it was threatening to drop below $60,000. Over $323 million in short positions were liquidated, and the random RSI touched 100, with ETF net inflows of $257.7 million, the highest since early February.
This pattern has been broken.
I want to be cautious here. Correlation does not equal causation, and multiple factors are at play: Trump's State of the Union, oversold technical conditions, short covering. The Fear and Greed Index is at 11, in extreme fear territory, which is often a counterpoint. The RSI has dropped to 15.80, a reading not seen since the COVID crash in 2020, which led to a 1400% surge afterward. But the timing cannot be ignored.
Rumors are circulating on X that Jane Street "has been forced to shut down its trading algorithms." Jane Street told Cointelegraph that these are "baseless opportunistic claims." Whether they have been forced to stop or have suspended actively due to legal prudence, the result is the same: the selling pressure has disappeared.
What does this mean for Bitcoin.
Spot Bitcoin ETFs were supposed to be a great equalizer: institutional access, regulated products, backed by BlackRock. They have indeed been hugely successful, with IBIT attracting over $20 billion since launch.
But the ETF structure introduced something Bitcoin was explicitly designed to escape from: trusted intermediaries with privileged access to pipelines.
When the SEC approved spot Bitcoin ETFs in January 2024, they required cash creation and redemption. Every time shares need to be created or redeemed, someone has to buy or sell actual Bitcoins. And the companies that insert themselves into this process—authorized participants—have a structural advantage over all other participants in the market.
In September 2025, the SEC approved physical creation and redemption of IBIT, meaning authorized participants can now directly exchange Bitcoin for ETF shares without going through fiat currency. This gave Jane Street, Virtu, JPMorgan, and Marex more direct control over the flows of Bitcoin in and out of the largest institutional packaged products.
The "10 AM dump" is essentially a symptom of the same malady that has plagued the gold market for decades.
I wrote about this issue in "The Endgame of Gold": paper trading against paper trading, institutions with the most access to pipelines can move prices before other market participants can react.
JPMorgan traders Gregg Smith and Michael Nowak were found guilty of engaging in deceptive trading practices in the precious metals futures market, with the scheme lasting eight years, involving thousands of illegal trades. JPMorgan paid a $920 million settlement. Deutsche Bank paid $30 million for the same issue. UBS, HSBC, and six individual traders also face anti-fraud violation charges from the CFTC.
The same script, different assets.
Every time, these firms call it "making markets," "arbitrage," "hedging." Euphemisms abound, but the outcome is always the same: ordinary people get harvested while insiders profit from the spread.
So where do we go from here?
The broader structural picture has not changed. The $4.5 billion outflow from ETFs in the first eight weeks of 2026 looks startling, but Strategy (Saylor's company) just purchased $39 million worth of BTC, accounting for 99% of the total purchasing by public companies during this period. The big players are not selling; they are waiting for the algorithms to do their work.
And perhaps, just perhaps, those algorithms have finished their work.
If Jane Street has been forced—whether due to legal risks, regulatory scrutiny across multiple continents, or simple self-preservation—to withdraw from their so-called daily selling plans, that removes a structural resistance that has been suppressing Bitcoin for the past four months.
Bitcoin was born for this moment. A monetary system that does not rely on trusted intermediaries, without authorized participants, that will not be preemptively traded based on information relayed through back channels by former interns.
But let's not forget how we got here. The companies that were supposed to "make markets" and "provide liquidity" are the same ones accused of knowing about the collapse in advance, manipulating national stock indices, and algorithmically dumping the ETFs that were supposed to track the assets.
This is the system that Bitcoin was designed to replace.
Further reading: The truth about the LUNA collapse? Someone knew about the evaporation of $40 billion 10 minutes in advance
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