The Luna crash, Bitcoin manipulation, and the Jane Street scandal: A deep dive
Explore the Jane Street scandal: Accusations of orchestrating the Terra/Luna crash and manipulating Bitcoin. Get the facts and understand the controversy.
The “10am Manipulation” and the Terra/Luna Collapse
At the center of the case lies a practice dubbed the “10am manipulation” (or “10am dump”). For months, traders had observed abnormally high and recurring selling pressure on Bitcoin, precisely at 10am New York time.
Suspicions quickly turned to major institutional players, and the name of Jane Street began circulating insistently. The theory is simple: by selling massively at a precise time, it’s possible to artificially drive down the price and then buy back at a lower cost, a practice comparable to insider trading if based on non-public information.
The connection to the Terra/Luna collapse, which wiped out $40 billion in just a few days in May 2022, is even more troubling. According to a lawsuit filed in February 2026 by the bankruptcy administrator of Terraform Labs, Jane Street allegedly used confidential information to anticipate and accelerate the fall of UST, the algorithmic stablecoin of the ecosystem. The lawsuit details how, just minutes after Terraform Labs quietly withdrew $150 million in liquidity from UST, a wallet linked to Jane Street allegedly sold $85 million worth of UST, triggering panic and the fatal depegging of the stablecoin.
The Impact on Bitcoin and Market Reaction
The announcement of the lawsuit against Jane Street had an unexpected and spectacular effect on the market. On the very day the case was made public, the infamous “10am manipulation” did not occur. Instead of the usual drop, Bitcoin experienced a strong surge, climbing to $66,200. For many observers, this correlation is anything but coincidental. The sudden halt of massive 10am selling, coupled with news of the lawsuit, was interpreted as confirmation of the suspicions weighing on Jane Street.
The Jane Street case, if the allegations are confirmed, could have profound and lasting consequences on the cryptocurrency ecosystem. It highlights the need for stricter regulation to protect investors against market manipulation and insider trading.
While Jane Street denies the accusations, calling the lawsuit “desperate and baseless,” the market’s reaction seems to indicate that the crypto community has already formed its opinion. The long-term impact on confidence in Bitcoin and other cryptocurrencies will depend on how this case is resolved and what measures are taken to prevent such conduct in the future.
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Charles Ledoux
Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
DISCLAIMER
This article is for informational purposes only and should not be considered as investment advice. Some of the partners featured on this site may not be regulated in your country. It is your responsibility to verify the compliance of these services with local regulations before using them.
This article is for informational purposes only and should not be considered as investment advice. Some of the partners featured on this site may not be regulated in your country. It is your responsibility to verify the compliance of these services with local regulations before using them.
DISCLAIMER
This article is for informational purposes only and should not be considered as investment advice. Trading cryptocurrencies involves risks, and it is important not to invest more than you can afford to lose.
InvestX is not responsible for the quality of the products or services presented on this page and cannot be held liable, directly or indirectly, for any damage or loss caused by the use of any product or service featured in this article. Investments in crypto assets are inherently risky; readers should conduct their own research before taking any action and invest only within their financial means. This article does not constitute investment advice.
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