Jane Street Capital is doing what Jane Street does best: trading. Even as it faces a lawsuit from the Terraform Labs bankruptcy administrator alleging insider trading, the New York trading firm hasn’t skipped a beat in its Bitcoin activities. On March 16, the firm received 205.36 BTC (worth £15.08 million), and onchain data shows it’s been actively moving Bitcoin throughout the legal drama. Here’s the thing about crypto drama: the paperwork doesn’t stop the spreadsheets. Let’s break it down.
The Lawsuit That Started It All
Terraform Labs’ bankruptcy administrator isn’t messing around. The lawsuit alleges that Jane Street engaged in insider trading and strategically dumped Bitcoin right when the U.S. market opens at 10 AM EST—a move that allegedly hastened the collapse of Terraform Labs. The original Terraform collapse in 2022 was catastrophic: its twin cryptocurrencies (TerraUSD and LUNA) crashed, wiping out an estimated £40 billion in investor losses. Terraform Labs filed for Chapter 11 bankruptcy in January 2024, and now the administrators are pointing fingers at Jane Street. The firm calls the claims “baseless, opportunistic”—but the timing has certainly raised eyebrows.
The “10 AM Dump” Mystery
The crypto community has long been convinced that Jane Street orchestrates a coordinated Bitcoin sell-off every morning at 10 AM EST. According to crypto influencer Justin Bechler, the firm allegedly executes algorithmic selling to buy Bitcoin ETF shares at a discount—a strategy made possible because Jane Street is an authorised participant and liquidity provider for major Bitcoin ETFs (BlackRock, ARK 21Shares, Fidelity, Franklin Templeton). But here’s the thing: when Jane Street got sued, the “10 AM dump” suddenly stopped happening. Bitcoin actually surged during U.S. trading hours instead of tanking.
However, not everyone buys the conspiracy. CryptoQuant research head Julio Moreno dismissed the allegations, arguing that what Jane Street does—buying spot Bitcoin and selling futures—is standard delta-neutral trading that every fund does. The real question isn’t whether Jane Street trades; it’s whether they’re breaking the law whilst doing it.
The Bottom Line
Jane Street continues trading Bitcoin without legal restrictions, despite the insider trading allegations. The firm’s trading activity remains unchanged, suggesting either the lawsuit has no teeth or the firm is confident in its defence. What’s clear is that crypto market dynamics are under scrutiny like never before—and the eyes are firmly on how this case unfolds.
FAQ
What exactly is Jane Street being sued for?
The Terraform Labs bankruptcy administrator alleges that Jane Street engaged in insider trading and deliberately dumped Bitcoin at specific times (10 AM EST), hastening the collapse of Terraform Labs and wiping out £40 billion in investor losses.
What’s the “10 AM dump”?
A theory popular in the crypto community that Jane Street co-ordinates large Bitcoin sell-offs every morning at 10 AM EST when U.S. markets open, allowing them to buy Bitcoin ETF shares at a discount through their role as an authorised participant.
Is Jane Street allowed to trade Bitcoin whilst being sued?
Yes. Jane Street is not legally restricted from trading Bitcoin, and recent onchain data shows the firm continues to actively trade, including receiving 205.36 BTC worth £15.08 million on March 16.
What’s delta-neutral trading?
It’s a strategy where a trader buys spot assets (like Bitcoin) whilst simultaneously selling futures contracts to hedge market risk—a standard practice used by many funds to maintain price neutrality.
Why does this matter for Bitcoin investors?
If Jane Street is manipulating the market at specific times, it could distort Bitcoin’s natural price discovery. The lawsuit and resulting scrutiny may force greater transparency around how large trading firms operate in crypto markets.
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Effective Date: 15th July 2025
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