Jane Street Faces New Lawsuit: Trump Media Calls For Federal Investigation

Reason to trust Strict editorial policy that focuses on accuracy, relevance, and impartiality Created by industry experts and meticulously reviewed The highest standards in reporting and publishing How Our News is Made Strict editorial policy that focuses on accuracy, relevance, and impartiality Ad discliamer Morbi pretium leo et nisl aliquam mollis. Quisque arcu lorem, ultricies quis pellentesque nec, ullamcorper eu odio. Jane Street, one of the world’s largest market-making firms, has come under growing scrutiny as a series of allegations have surfaced linking the company to major disruptions in the crypto market. 

The firm is already facing a federal lawsuit tied to the collapse of Terraform Labs, and now new claims circulating on social media suggest that Trump Media has accused Jane Street and other trading firms of “naked short selling” in a letter to Congress. Jane Street Rejects Terra Allegations

The legal troubles began earlier this week. On February 23, a lawsuitwas filed in the US District Court for the Southern District of New York accusing Jane Street of using confidential information obtained from Terraform Labs to shield itself from heavy losses before the Terra/Luna ecosystem unraveled in May 2022.  Related Reading Coinbase Stablecoin Revenue Could Surge 7x Under GENIUS Act, Bloomberg Analysts Say 17 hours ago

According to the complaint, Jane Street allegedly leveraged insider knowledge to avoid more than $200 million in potential losses ahead of the implosion. The firm has strongly denied the accusations, characterizing the lawsuit as “desperate” and describing it as a “transparent attempt to extract money.”

Beyond the courtroom, additional claimshave gained traction online. Some market participants have alleged that Jane Street manipulated Bitcoin (BTC) prices by operating an algorithm that allegedly triggered consistent sell-offs at 10 a.m. each day for months. 

According to these claims, the strategy involved pushing prices lower, triggering liquidations among retail traders, and then repurchasing Bitcoin at reduced levels in a repeated cycle.  Naked Short Selling Inquiry

Adding another layer to the controversy, market commentator MartyParty statedon Thursday that Trump Media had sent a letter to members of Congress calling for a full investigation into Jane Street, Citadel and other firms over alleged naked short selling. 

Naked short selling refers to the practice of selling shares without first borrowing them, a tactic that is restricted under US securities law.  Related Reading Circle Tops Q4 Revenue Forecasts, Shares Surge 30% — Key Numbers Inside 13 hours ago

As of Thursday afternoon Eastern Time, there had been no official confirmation of such a letter, nor any public statement from Trump Media, Jane Street, or Citadel verifying the claim. The 1D chart shows the total crypto market cap valuation at $2.29 trillion. Source: TOTAL on TradingView.com

Featured image from OpenArt, chart from TradingView.com