Jane Street: Legendary market maker in the court

Jane Street is one of the world’s largest proprietary trading and market-making firms, specializing in quantitative analysis and highly active in derivatives markets. The complexity of its strategies, the scale of its operations, and its distinctive organizational culture have made it a “legend” in financial markets. In recent days, the firm has again drawn attention in connection with serious regulatory allegations and litigation.

In the summer of 2025, India’s regulator SEBI issued an interim order against entities affiliated with Jane Street, which in practice resulted in restrictions on access to the local market. SEBI alleged a scheme involving the exploitation of market microstructure on instrument expiry days—through aggressive order flow in the components of the Bank Nifty index and/or futures contracts, followed by profit-taking in the options market. The regulator cited approximately USD 567 million as the amount of alleged “unlawful gains” to be secured. It is important to emphasize that this is a stage of proceedings involving allegations, not a final, binding determination.

Even more attention has been drawn by a lawsuit filed in the United States on 23 February 2026 by the administrator of the Terraform Labs liquidation process. The complaint raises allegations of using material nonpublic information and front-running liquidity-related actions within the TerraUSD/LUNA ecosystem in May 2022. The litigation theory is that these actions accelerated and deepened the crisis that ultimately led to the project’s collapse. Jane Street has publicly rejected the allegations, calling them baseless and opportunistic, while arguing that investor losses resulted primarily from misconduct and abuses by Terraform’s management.

The Terraform collapse is complex in its own right and forms part of the broader context of the 2022 crypto market liquidity crunch and deleveraging, the later chapter of which was the collapse of FTX. The appearance of a Jane Street angle, along with the fact that portions of the lawsuit are redacted, has fueled speculation in the crypto community and a wave of conspiracy theories—however, this “noise” is not evidence and should be treated separately from the procedural facts.

For now, the key is to distinguish between the two matters: in India, there is a regulatory proceeding at the interim, asset-securing stage concerning alleged conduct on expiry days; in the United States, there is a civil dispute over alleged use of nonpublic information at a critical moment for Terra/LUNA.

The final picture will depend on the evidentiary record and the decisions of regulators and courts, so categorical conclusions should be avoided until the proceedings develop further.