Trading giant Jane Street faces a major lawsuit accusing it of systematically manipulating Bitcoin markets. Court documents allege the firm used a two-step strategy: first pumping prices with large cash positions, then dumping coins to profit from short bets. Researchers identified a "10 AM daily dump" pattern that wiped billions off Bitcoin's value, halting only after legal action began. In the past two days alone, the cessation of these dumps helped Bitcoin end a losing streak and rebound to $68,000.
The Strategy: Cash Buildup and Orchestrated Sell-Off
The alleged scheme involved deploying massive capital to push prices higher in regular markets, then executing large sell orders while holding short positions. India's Securities and Exchange Board (SEBI) in July 2025 imposed a record fine of over ₹4,800 crore ($580 million) on Jane Street for similar conduct in equity derivatives markets, where its trades single-handedly moved the Bank Nifty index. The firm paid the full amount into an escrow account while contesting the order.
The Anthropic-FTX Connection
One of the most startling revelations ties Jane Street to the FTX collapse. In 2021, FTX bought an 8% stake in AI startup Anthropic for $500 million. Since FTX founder Sam Bankman-Fried was a former Jane Street employee, some allege the firm knew his empire was fragile. By allegedly accelerating the Terra-Luna crash in 2022, Jane Street triggered a chain reaction that ended with FTX's bankruptcy. During FTX's asset liquidation, Jane Street bought nearly $100 million in Anthropic shares—a stake that later surged in value, a profit only possible because of the prior market crash.
Regulatory Fallout
This lawsuit lands as Bitcoin gains mainstream adoption. If proven, it could reshape how high-frequency trading firms interact with ETFs and exchanges. More investigations from bodies like the SEC are expected in coming months. Jane Street denies all allegations, but the market is already reacting to the manipulation claims.