The collapse of $40 billion, the knife at 10 a.m. every day—all point to the same name: Jane Street.

Author: Roberto Rios

Compiled by: Hedgehog , PANews

Jane Street Group is a New York-based quantitative trading firm. They have no CEO and, in their own words, operate like an "anarchist commune."

The most powerful trading firm you've never heard of has just been caught in two separate incidents on two continents, finally freeing Bitcoin.

They generated $24 billion in net trading revenue in the first nine months of 2025, surpassing the $20.5 billion for the entire year of 2024. The second quarter of 2025 alone saw $10.1 billion, the highest single-quarter trading revenue ever recorded by any Wall Street firm.

By any measure, they are the most profitable trading institutions on Earth.

This week, Terraform Labs' bankruptcy administrator filed a lawsuit in Manhattan federal court, accusing Jane Street of using insider information to trade ahead of the Terra Luna crash in May 2022. That crash wiped out $40 billion in market value and triggered a chain reaction that ultimately dragged down Celsius, Three Arrows Capital, and FTX.

The simplistic and brutal nature of the accusations is astonishing.

On May 7, 2022, Terraform Labs quietly withdrew $150 million of UST from Curve3pool (a major decentralized liquidity pool) without any public notice, simply withdrawing the 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 Bryce Pratt, a former Terraform intern, established private communication channels with his former Terraform colleagues after joining Jane Street as a full-time employee in September 2021. He allegedly passed significant, non-public information regarding Terraform liquidity operations directly to Jane Street's trading desk.

The lawsuit names four defendants: Jane Street Group LLC, co-founder Robert Granieri, and employees Bryce Pratt and Michael Huang.

The bankruptcy administrator's statement hit the nail on the head: "The transactions made by Jane Street would have been impossible without their exclusive insider information."

Worse still—the lawsuit also alleges that Jane Street's divestment helped trigger UST's decoupling, pushing the entire Terraform ecosystem into a death spiral. LUNA plummeted from over $80 to near zero, wiping out $40 billion. Ordinary people lost everything—retirement savings, college funds, life savings, all vanished in days.

Jane Street's response? They called the allegations "desperate" and "baseless."

But the problem is: this isn't the first time.

In July 2025, the Securities and Exchange Commission of India (SEBI) filed one of the largest market manipulation charges against Jane Street in Indian history. The SEBI investigation found that Jane Street carried out a textbook pump-and-dump operation on the Bank Nifty Index on 18 derivative expiration dates between January 2023 and March 2025.

Trading techniques are as mechanical as clockwork:

In the morning: Jane Street's algorithm aggressively bought Bank Nifty constituent stocks and futures, pushing the index up by 1% to 1.3%. On some days, SEBI found that Jane Street alone contributed all the positive price impact of the index. Simultaneously, they established a large number of short option positions, primarily selling call options and buying put options, at proportions far exceeding the normal range for their stock positions. SEBI found that the delta equivalent size of the option positions was 7.3 times that of the stock and futures positions. This is not hedging, not arbitrage; it's directional manipulation disguised as extra steps.

Afternoon: Reverse strategy. Sell all stocks bought in the morning; the index falls, and the short options profit. Repeat this cycle every expiration date.

SEBI's assessment: Illegal profits amounted to 4.843 billion rupees, approximately $580 million. They characterized Jane Street's actions as "a deliberate attempt to manipulate settlement prices," noting that Jane Street continued this strategy even after the National Stock Exchange of India issued a clear warning in February 2025.

SEBI used unusually strong language: "The integrity of the market, and the trust of millions of small investors and traders, can no longer be held hostage by the schemes of such untrustworthy actors."

Jane Street has been 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 is still being heard by the Securities Appeals Court of India.

Now let's talk about Bitcoin.

Since November 2025, Bitcoin traders have noticed a peculiar phenomenon: every morning around 10:00 AM Eastern Time, precisely when the US stock market opens, a large number of sell orders would hit BTC and related ETF stocks. This pattern is strangely consistent—Bitcoin would surge overnight during Asian and European trading hours, only to be dumped as soon as it opened in New York.

See also:

The numbers are alarming. Charts from December 2025 show that BTC plummeted from $89,700 to $87,700 within minutes on certain days, liquidating $171 million of leveraged long positions before rebounding. This pattern repeated itself on December 1st, 5th, 8th, 10th, 12th, 15th, and throughout January and February.

The encrypted Twitter account called it the "10 o'clock crash".

The criticism is directed at Jane Street, and for good reason. Jane Street is one of only four authorized participants in BlackRock's IBIT (the world's largest spot Bitcoin ETF), 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 the pipeline for moving Bitcoin into and out of institutionally packaged products.

Their 13F filings confirmed the massive position. Jane Street held approximately $5.7 billion worth of IBIT stock in the third quarter of 2025, and added another $276 million in the fourth quarter, bringing their total holdings to over 20 million shares, worth approximately $790 million at the end of the year. At its peak, their IBIT holdings were close to $2.5 billion.

However, what raises suspicion is that while Jane Street was allegedly selling off spot BTC every morning, it increased its MSTR (Strategy, formerly MicroStrategy) holdings by 473% in the fourth quarter of 2025, accumulating 951,187 shares worth approximately $121 million. Meanwhile, major funds such as BlackRock and Vanguard were massively reducing their MSTR holdings.

Think about it carefully: Sell BTC at the opening bell, driving down the price, liquidating leveraged long positions, and then buy it back at a lower price. At the same time, buy a large amount of the most leveraged proxies against Bitcoin in the market, waiting for the inevitable rebound.

Glassnode co-founders Jan Happel and Yann Allemann reignited the theory through their X account, Negentropic, linking algorithmic trading models to the Terraform lawsuit. The Milk Road account further amplified the impact, describing “persistent rumors” about institutional trading desks operating “very specific and unsavory manipulation.”

Then the lawsuit was finalized, and something extraordinary happened.

After Terraform filed its lawsuit against Jane Street, the "10 o'clock crash"... disappeared. For the first time in months, Bitcoin did not plummet at the US market open; instead, it rose.

Today, February 25, 2026, Bitcoin surged over 3%, breaking through multiple resistance levels and trading above $68,000—just days after threatening to fall below $60,000. Over $323 million in short positions were liquidated, the Stochastic RSI hit 100, and ETFs saw a net inflow of $257.7 million, the highest since early February.

This pattern has been broken.

I need to be cautious here. Correlation does not equal causation; multiple factors are at play: Trump's State of the Union address, oversold technical conditions, and short covering. The Fear & Greed Index is at 11, in the extreme fear zone, which is often a reversal point. The RSI has fallen to 15.80, a reading not seen since the 2020 COVID-19 crash, which was followed by a 1400% rally. But the timing is not to be ignored.

Rumors circulated on X that Jane Street was "forced to shut down its trading algorithm." Jane Street told Cointelegraph that these were "unfounded opportunistic claims." Whether they were forced to stop or voluntarily suspended out of legal caution, the result was the same: the selling pressure disappeared.

What does this mean for Bitcoin?

Spot Bitcoin ETFs were supposed to be a great balancer: institutional access, regulated products, and BlackRock backing. They were indeed very successful, with IBIT alone attracting over $20 billion since its launch.

But the ETF structure introduces something that Bitcoin was explicitly designed to escape from: a trusted intermediary with privileged access to the pipeline.

When the SEC approved spot Bitcoin ETFs in January 2024, it required creation and redemption in cash. Each time shares need to be created or redeemed, someone must buy or sell actual Bitcoin. 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 the physical creation and redemption of IBIT, meaning authorized participants can now directly exchange Bitcoin for ETF units without going through fiat currency. This gives Jane Street, Virtu, JPMorgan Chase, and Marex more direct control over the inflows and outflows of Bitcoin in the largest institutional packaged products.

The "10 o'clock sell-off" is essentially a symptom of the same ailment that has plagued the gold market for decades.

I wrote about this issue in "The Endgame of Gold Begins": Paper trading versus paper trading, institutions with the most access to the pipeline can move prices before other market participants can react.

JPMorgan Chase traders Gregg Smith and Michael Nowak were convicted of engaging in fraudulent trading in the precious metals futures market over an eight-year scheme involving thousands of illegal transactions. JPMorgan paid a $920 million settlement. Deutsche Bank paid $30 million for the same offense. UBS, HSBC, and six individual traders also face anti-fraud charges from the CFTC.

Same script, different assets.

Each time, these companies call it "market making," "arbitrage," or "hedging." The euphemisms are endless, but the result is always the same: ordinary people are exploited, while insiders profit from the price difference.

So what should we do next?

The broader structural picture remains unchanged. While the $4.5 billion ETF outflow in the first eight weeks of 2026 may seem alarming, Strategy (Saylor's company) just bought $39 million worth of BTC, representing 99% of all publicly traded company purchases during that period. The big players aren't selling; they're waiting for algorithms to do their job.

And perhaps, just perhaps, those algorithms have already finished.

If Jane Street is forced—whether for legal risks, regulatory scrutiny across continents, or simply to protect itself—to withdraw from its so-called daily selling program, it would remove 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, does not require authorized participants, and is not preempted by information passed to the trading floor by former interns through private channels.

But let's not forget how we got here. Those companies that were supposed to be "market makers" and "providing liquidity" are the same ones accused of knowing about the crash in advance, manipulating national stock indices, and algorithmically dumping the assets their ETFs were supposed to track every day.

This is the system that Bitcoin was designed to replace.

Related reading: The truth behind LUNA's collapse? Someone predicted the $40 billion loss 10 minutes in advance.