Jane Street Resumes Crypto Trading Amid Ongoing Terraform Labs Lawsuit
Jane Street, the global quantitative trading firm and an authorized participant for several spot Bitcoin ETFs, has re-entered active cryptocurrency trading. On-chain data tracked by Lookonchain reveals that wallets associated with the firm received approximately 205 Bitcoin, valued at around $15 million, from institutional exchanges BitMEX and LMAX Digital on Monday.
Context: The Terraform Labs Lawsuit and Historical Accusations
This renewed on-chain activity occurs while Jane Street faces significant legal and public scrutiny related to the May 2022 collapse of the Terra ecosystem, which saw the depegging of TerraUSD (UST) and the subsequent crash of LUNA, erasing roughly $40 billion in market value. Todd Snyder, the bankruptcy plan administrator for Terraform Labs, has filed a lawsuit against Jane Street. The suit alleges the firm engaged in front-running by using non-public insider information to profit from the crash. A separate, similar $4 billion claim has also been filed against Jump Trading.
Alongside the formal legal action, a prominent theory circulating on social media platform X (formerly Twitter) accused Jane Street of systematically manipulating Bitcoin price patterns. Crypto traders pointed to a recurring trend where Bitcoin prices frequently declined around 10:00 a.m. Eastern Time—shortly after the U.S. market open—for an extended period leading into early 2026.
The “10 A.M. Pattern” Theory and Market Impact Claims
The theory posits that Jane Street, leveraging its authorized participant role for BlackRock’s iShares Bitcoin Trust ETF, would strategically sell Bitcoin holdings. This selling pressure was hypothesized to trigger a cascade of liquidations in the broader crypto derivatives market, driving prices down. With Bitcoin and related assets at a temporary low, the firm could then accumulate ETF shares at a discount before a recovery, securing an arbitrage profit.
Observers noted that this alleged sell-off pattern appeared to cease in late February 2026, shortly after the Terraform Labs lawsuit against Jane Street became public knowledge. This temporal correlation fueled further speculation about a potential connection.
Expert Rebuttals and Official Denials
However, several market analysts and veterans have publicly dismissed the manipulation allegations as a misunderstanding of market mechanics. Rob Hadick, a partner at Dragonfly Capital, stated that the claims demonstrate a “fundamental misunderstanding of derivatives markets and the role of ETF authorized participants.” An individual with direct knowledge of Jane Street’s operations told Fortune in late February that the circulating theory was an “absolutely ridiculous” conspiracy theory.
Authorized participants like Jane Street play a crucial, regulated role in the ETF creation and redemption process. Their primary function is to provide liquidity and ensure the ETF’s share price tracks the underlying asset’s price closely. While their trading activity is significant, attributing complex, multi-factor market movements like a specific hourly price drop to a single entity’s strategy overlooks the vast, global, and algorithmic nature of modern cryptocurrency markets.
The resumption of Jane Street’s direct crypto trading, as evidenced by the recent $15 million Bitcoin inflow, underscores its continued participation in the digital asset ecosystem. This activity is now unfolding under the heightened spotlight of ongoing litigation and persistent, though contested, theories about its historical market influence.
Disclosure: This article was edited by Vivian Nguyen. For more information on how we create and review content, see our Editorial Policy.
