After India action, Jane Street faces possible DOJ probe; sources deny investigation

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• US DOJ probes Jane Street for alleged market manipulation
• Jane Street denies claims, faces lawsuits and regulatory scrutiny
• India's SEBI also investigating Jane Street over trade practices

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Jane Street Group is likely to face a potential investigation by the US Department of Justice over alleged manipulation in cryptocurrency markets. The reported probe, tied to claims of insider trading and algorithmic strategies, could add to the firm’s mounting regulatory challenges, including its ongoing tussle with Indian authorities over equity trading practices.

However, higly placed sources close to Jane Street denied any such investigation. Sources close to Jane Street said, they are not aware of any investigation by DoJ.  An email sent o DOJ also did not elicit any response on the query about investigation against Jane Street Group in alleged insider trading in the Terraform case.

According to reports, the DOJ's inquiry was first highlighted by a Reddit user and has since gained traction on social media and crypto news platforms. The investigation apparently focuses on Jane Street's trading activities, including potential front-running during high-profile events like the 2022 Terra ecosystem collapse, where the firm faced a lawsuit accusing it of contributing to a $40 billion market wipeout.

Additionally, recent rumors link the probe to patterns in Bitcoin price drops around 10 a.m. Eastern Time, allegedly tied to Jane Street's algorithms.

As per reports, on February 23, a case was filed in the US District Court for the Southern District of New York alleging that Jane Street used confidential information obtained from Terraform Labs to protect itself from significant losses ahead of the Terra, Luna ecosystem’s collapse in May 2022.

Jane Street has denied these allegations, describing related lawsuits as "baseless" and attributing market failures to external factors.

Jane Street's is already fighting a high-profile regulatory battle in India, which originated from a 2024 trade secrets dispute with rival firm Millennium Management.

In April 2024, Jane Street sued two former employees, Douglas Schadewald and Daniel Spottiswood, who defected to Millennium, accusing them of stealing a proprietary options trading strategy focused on Indian indices like BANKNIFTY. The strategy reportedly generated over $1 billion in profits for Jane Street in 2023 alone. The US lawsuit, which revealed details of the India-centric approach, settled in December 2024 for an undisclosed amount.

However, the disclosures caught the attention of India's Securities and Exchange Board of India (SEBI), prompting an investigation into potential market manipulation.

Jane Street has challenged the order, arguing it was based on incomplete information and denying any wrongdoing.

The case is now before India's Securities Appellate Tribunal (SAT). As per the last update, SAT adjourned the hearing in Jane Street's appeal against SEBI's July 2025 interim order on February 25, 2026, due to time constraints.