Zerodha’s Nithin Kamath Reacts to Jane Street Ban in India | Internet Applauds SEBI’s Bold Move

Zerodha’s Nithin Kamath Reacts to Jane Street Ban in India: The trading floors of India are in a storm as the Securities and Exchange Board of India (SEBI) has gone hard against US-based Jane Street on charges of manipulation.

The interim order, that comes with a confiscation of 48.4 billion ( 567 million) of purported illegal earnings, has elicited trenchant, and even vitriolic sequels. Traders, CEOs and market analysts reacted harshly, even scathingly to the seizure in the name of confiscation of the alleged ill gotten gains.

The move by SEBI was boldly supported by Nithin Kamath, co-founder of Zerodha who added the all-important perspective of the implications that matter to more people, “You’ve got to hand it to SEBI for going after Jane Street. If the allegations are true, it’s blatant market manipulation. The shocking part? They kept at it even after receiving warnings from the exchanges.”

You’ve got to hand it to SEBI for going after Jane Street. If the allegations are true, it’s blatant market manipulation.

The shocking part? They kept at it even after receiving warnings from the exchanges. Maybe this is what happens when you're used to the lenient U.S.… pic.twitter.com/pZGEnfnDXl

— Nithin Kamath (@Nithin0dha) July 4, 2025

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He added that Jane Street might have acted that way because it was accustomed to the lax US-regulatory framework with dark pools and payment of order flow, which would not be possible in India.

However, Kamath also cautioned about the fallout, “Prop trading firms like Jane Street account for nearly 50% of options trading volumes. If they pull back, which seems likely, retail activity (~35%) could take a hit too. So this could be bad news for both exchanges and brokers.”

He went on to say that how much reliant Indian F&O markets are to these global prop titans will emerge in the days to come.

A vivid analogy of the CEO of Capitalmind AMC was Deepak Shenoy, “Turns out Jane Street did a massive version of GameStop on India.”

In the meantime, the strategy of the firm was declared by the trader Piyush Chaudhry as the brute-force manipulation, “SEBI’s order makes it clear: There was no genius at play in Jane Street’s strategy, just sheer Money Muscle. No cutting-edge quant work or elegant arbitrage, but exploiting liquidity to rig Expiry in their favour. No sophistication, no finesse, just capital overpowering structure.”

Ravindra, an entrepreneur wrote, "The game must always remain fair. But Jane Street crossed the line, cheating under the guise of technology."

In July 3 interim order released by SEBI, Jane Street and its affiliate firms apply competitive derivatives market tactics to drive prices on monthly expiry days in the Bank Nifty index. According to SEBI, the trades affected the retail investors adversely and skewed the expiry results in favor of Jane Street.

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It is the strongest penalty on any foreign company by SEBI not only in restrictions but monetary penalties too. The confiscated cash of 48.4 billion ₹ was referred to as an illegal profit of the possible manipulation.

Jane Street was founded in 2000 as one of the proprietary trading firms with extensive influence around the world. It has more than 3,000 employees and has offices in the US, Europe and Asia having made a report of the annual revenue of 20.5 billion dollars last year according to the Reuters news agency.

For its posturing the firm defines itself as a "puzzle-solving" collective whose quantitative models are advanced to stabilize the global markets.

However, that story has not gone down well with India market regulator when it comes to its domestic business.

“Some of the firm’s strategies were manipulative and led to losses for retail investors,” SEBI stated.

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