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

Jane Street, one of the world’s largest market-making firms, is facing increasing scrutiny amid a series of allegations related to the company and significant market fluctuations in the cryptocurrency space.
The company is currently involved in a federal lawsuit concerning the collapse of Terraform Labs, and recent social media reports suggest that Trump Media has accused Jane Street and other trading firms of “naked short selling” in a letter sent to Congress.
Jane Street Denies Allegations Against Terra
Legal troubles began earlier this week. On February 23, a lawsuit was filed in the U.S. District Court for the Southern District of New York, accusing Jane Street of using insider information obtained from Terraform Labs to protect itself from heavy losses before the Terra/Luna ecosystem collapsed in May 2022.
According to the complaint, Jane Street is accused of exploiting insider information to avoid potential losses of over $200 million before the company’s downfall. The firm has vehemently denied the allegations, claiming the lawsuit is “desperate” and an “outright attempt to extort money.”
Beyond the courtroom, other allegations have also attracted attention online. Some market participants believe that Jane Street manipulated Bitcoin (BTC) prices by operating an algorithm that allegedly caused continuous sell-offs at 10 a.m. every day for several months.
According to these claims, the strategy involved pushing prices lower, triggering mass liquidations among retail traders, and then buying Bitcoin at lower prices in a repetitive cycle.
Naked Short Selling Allegation
Another controversial aspect was highlighted by market commentator MartyParty on Thursday, who stated that Trump Media sent a letter to Congress urging a comprehensive investigation into Jane Street, Citadel, and other firms over allegations of naked short selling.
Naked short selling is the practice of selling shares without borrowing them first, a tactic restricted under U.S. securities laws.
As of Thursday afternoon Eastern Time, there has been no official confirmation of the letter, nor any public statements from Trump Media, Jane Street, or Citadel confirming this information.