Market maker Jane Street is facing increased scrutiny. The firm is already a defendant in a federal lawsuit related to the collapse of Terraform Labs. New allegations suggest Trump Media has accused Jane Street and other trading firms of "naked short selling" in a letter to Congress.
The lawsuit, filed in the US District Court for the Southern District of New York, claims Jane Street used confidential information from Terraform Labs to avoid over $200 million in losses before the Terra/Luna ecosystem unraveled in May 2022. Jane Street has strongly denied these accusations.
Further claims circulating online allege Jane Street manipulated Bitcoin (BTC) prices through a daily algorithm that triggered sell-offs, leading to retail trader liquidations, followed by repurchases at lower prices.
Adding to the controversy, reports indicate Trump Media sent a letter to Congress calling for an investigation into Jane Street, Citadel, and others for alleged naked short selling, a practice restricted under US securities law. Official confirmation of this letter and statements from the involved parties are pending.