Jane Street, and the 'Swill Merchants' of the 21st Century

Jane Street made over $20 Billion in trading revenue in the last full FY, with $13 Billion in net profit. Just from India, the firm made a profit of ~$4 Billion (₹36,500 Cr) in just 27 months.

Turns out, their "core competence" was just plain old crime.

For starters, JS' business model is pretty simple. It loads on a particular security in the market in the morning hours, building momentum around it so the retail investors join the frenzy, only to dump it later with massive shorts placed on the side. At the end of the day, it benefits from the crash while the retail folks are left holding the bag. That's about it. That's the "trading strategy".

That's how they made all the money in the Indian markets as well. They used to prop up Bank Nifty in the morning hours, and then sold those positions while also placing massive shorts in the afternoon. They lost some money on the buy trades (placed from their Indian firms), and made all the money on the big shorts (placed from their foreign entities), thereby not only screwing the Indian markets - but also not paying any tax while at it.

The scale of the fraud, scam, or loot that these holes pulled off in India in just over two years isn’t appreciated enough. Until you realise that it’s more money that InfoEdge, MMT and Justdial (the three OG Indian internet players) have made ever since they started in the mid 90s, combined. In fact, $4 Billion is more money that what even Infosys could make last year. And Infosys employs ~3,20,000 people.

These bottom-of-the-barrel scumbags could have continued their loot for years undetected, but thankfully they got caught. The case is on and we'll see what happens. But.

There's another case where they didn't just do something extremely unethical, but fully illegal: They crashed $40 Billion worth of Luna with the good old insider trading.

Through a private group chat called “Bryces Secret” they screwed the market in 10 minutes. First, Terraform quietly pulled 150M UST from Curve’s 3pool. Then, as if by magic, JS pulled 85M UST from the same. The peg cracked, and 6 days later, it was all gone.

That's all what JS has ever done. The company doesn’t “solve any problem”. It doesn’t “help anyone”. It doesn’t create anything, neither does it have any “mission” to speak of. All it does is steal other people’s money. That's it.

Yet, when there was news of JS hiring in India with the big bucks, influencers all around began celebrating as if it was a great achievement. Perhaps there’s low awareness on what kind of a scam HFT is in general, but isn’t it strange that amidst all that intenet chatter, there were no questions about what JS does to be able to provide that kind of money?

No notes about where the money is coming from. No thoughts on what's actually happening. Just counting bucks and clapping like chimps? Isn't that extremely weird?

It's time we realise something: Bad money comes easy.

Betting apps, Onlyfans, scamming the retail investors, and so on. There’s a lot of money in filth.

Doesn't mean you should take it.

Two extremely rare pictures of the co-founder of Jane Street - Robert Granieri. He’s notoriously private, and perhaps for a reason.

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