RE: Favourite letters10 May 2026 09:24
1. Indian Market Manipulation Allegations (2025)
The Securities and Exchange Board of India (SEBI) accused Jane Street of using a complex strategy to manipulate the Bank Nifty index.
• The Claim: Regulators alleged Jane Street used one entity to buy large amounts of bank stocks to inflate the index, while another entity profited from derivatives that would gain value when the index eventually fell.
• Outcome: Jane Street denied wrongdoing, calling it "basic index arbitrage." While they were briefly banned from the Indian market, the ban was lifted after they placed $560 million into an escrow account pending further investigation.
2. Bitcoin Market Manipulation Claims (2026)
In early 2026, allegations surfaced regarding a "10 AM Bitcoin algorithm."
• The Claim: Some observers and lawsuits alleged that Jane Street systematically sold large volumes of Bitcoin at the same time each day to suppress prices.
• Serious Escalation: More recent reports suggested investigations into potential evidence destruction related to these trading patterns, though these remain allegations and have not resulted in a criminal conviction.
3. Terraform Labs Lawsuit
The wind-down trust of Terraform Labs (the company behind the failed Luna/UST crypto project) sued Jane Street, alleging the firm used insider information to profit from the collapse of the Terra ecosystem in 2022. Jane Street has dismissed this as a "cash-grab."
4. Other Notable Legal Actions
• Trade Secret Disputes: They settled a lawsuit in 2024 against Millennium Management and two former employees, accusing them of stealing secret trading strategies related to the Indian market.
• LME Nickel Dispute: Jane Street (alongside Elliott Management) sued the London Metal Exchange for canceling billions in nickel trades during a 2022 price spike. The court ultimately ruled against Jane Street.