tl;dr
The Commodity Futures Trading Commission (CFTC) is investigating Chicago-based trading firm Jump's involvement in the crypto market, particularly its trading and investment activities. This follows a period of challenges for Jump, including being linked to hacks and collapses, such as the $325 milli...
The Commodity Futures Trading Commission (CFTC) has launched an investigation into the Chicago-based trading firm Jump’s participation in the crypto market, focusing on its trading and investment activities, according to an undisclosed source familiar with the matter, as reported by Fortune Magazine.
The investigation comes after a tumultuous period for Jump, which has been recognized for its expertise in algorithmic trading. However, the company faced setbacks, including being linked to a series of hacks and collapses.
The company suffered a major blow with the $325 million hack of Wormhole, a decentralized finance (DeFi) platform designed to bridge separate blockchains. Moreover, following the collapse of FTX in November 2022, it was revealed that Jump had suffered nearly $300 million in losses as a top market maker on the failed crypto exchange.
Further controversy arose when the US Securities and Exchange Commission (SEC) filed a lawsuit against Terraform Labs and its founder Do Kwon in February 2023, related to the failed TerraUSD stablecoin. The SEC’s case concluded with a jury ruling in favor of the agency in April, following testimony from a former Jump employee who acted as a whistleblower.
In March 2023, the DOJ filed a criminal case against Do Kwon, mentioning Jump as a “US-based proprietary trading firm” that played a role in maintaining Terra’s peg. However, similar to the SEC lawsuit, no allegations of wrongdoing or charges were directed at Jump.
Subsequently, Jump scaled back its involvement in the crypto sector, spinning off two high-profile projects and opting out of the race for a spot in the Bitcoin ETF market.
The CFTC’s investigation into Jump’s crypto business is the latest inquiry by a federal agency in the US. While it remains unclear whether the agency is considering charges against the company, it is important to note that many of Jump’s activities, including crypto products, fall under the jurisdiction of the CFTC.
The Commodity Futures Trading Commission (CFTC) is investigating Chicago-based trading firm Jump's involvement in the crypto market, particularly its trading and investment activities. This follows a period of challenges for Jump, including being linked to hacks and collapses, such as the $325 million hack of Wormhole and suffering losses as a market maker on the failed crypto exchange FTX.
Additionally, Jump was mentioned in lawsuits filed by the SEC and DOJ related to Terraform Labs and its founder Do Kwon, but no specific allegations or charges were directed at Jump. The CFTC's inquiry is part of a wider crackdown on crypto-related activities by federal agencies in the US. While it's unclear if charges are being considered, many of Jump's activities, including in the crypto sector, fall under the CFTC's jurisdiction.
The daily chart shows the total crypto market cap’s valuation at $2.3 trillion. Source: TOTAL on TradingView.com Featured image from DALL-E, chart from TradingView.com
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