Key takeaways:
- In the wake of many rumors of a CFTC inquiry, Jump Trading’s head of digital assets, Kanav Kariya, stated he was resigning as president of Jump Crypto.
- Following the infamous collapse of the Terra ecosystem in May 2022, the trading firm was hit by an investor lawsuit.
In the wake of many rumors of a Commodity Futures Trading Commission (CFTC) inquiry, Jump Trading’s head of digital assets, Kanav Kariya, stated he was resigning as president of Jump Crypto.
The now-former president of the crypto trading company stated on social media on June 24 that he plans to focus on reading and building relationships with people as he looks for his next project. Kariya also considered his time with Jump Crypto during the previous few years, calling them “eventful.”
Hackers used the Wormhole bridge to create 120,000 wrapped Ethereum tokens (wETH), which were then exchanged for ether and other tokens on the Solana blockchain. This is when Jump Crypto’s problems started in February 2022.
After the event, Jump Crypto—the company that owned the Wormhole bridge developer—took ownership of the damages and deposited an equivalent amount of Ether tokens—worth $321 million at the time of the hack—into the bridge.
Following the infamous collapse of the Terra ecosystem in May 2022, the trading firm was hit by an investor lawsuit. The lawsuit claimed that Jump Crypto made $1.3 billion in profits by working with Do Kwon, Terra’s founder, to manipulate the price of Terra’s UST to keep the algorithmic stablecoin pegged to the US dollar.
The lawsuit further claimed that Jump Crypto received LUNA tokens at a high discount, often 99% off the market price, as payment for supporting UST and the Terra ecosystem.
Later in the year, worries about Jump Crypto’s involvement with FTX emerged. Representatives for the company calmed investor concerns by stating that Jump Crypto was “one of the most well-capitalized and liquid firms in crypto” and assured the public that the trading platform would not be closing.
The specific parameters of the ongoing CFTC inquiry into Jump Crypto are yet unknown; however, it is possible that the investigation will cover the trading actions mentioned in the investor lawsuit and in the SEC’s case against Terraform Labs.
It is crucial to remember that the CFTC’s inquiry into Jump Crypto does not necessarily indicate guilt or misconduct because the agency has not yet made any conclusions.
