Jump's dark history puts it in an awkward position as it resumes its crypto business

Author: Nian Qing, ChainCatcher

Last August, a rapid and huge sell-off by Jump Trading pushed the crypto market into the abyss, further triggering the "805 crash". At that time, rumors about the collapse of "Jump" intensified.

In the six months since then, the few news about Jump have almost all revolved around its internal and external lawsuits and lawsuits.

Recently, CoinDesk quoted people familiar with the matter as saying that Jump is currently fully resuming its cryptocurrency business. Jump Trading's official website shows that Jump is recruiting a group of cryptocurrency engineers for its offices in Chicago, Sydney, Singapore and London. In addition, another person familiar with the matter added that Jump plans to start supplementing US policy and government liaison positions at the appropriate time.

Jump was once known as the "absolute king" of the trading world. With its ultra-low latency trading system and complex algorithm design, Jump is one of the key liquidity providers in traditional finance. As the scale of the crypto market continues to expand, Jump began to make markets for cryptocurrencies and invest in crypto projects. Later, in 2021, it officially established its crypto business unit Jump Crypto.

However, a bet that accompanied the birth of Jump Crypto also laid the hidden danger for its subsequent tragedy.

The rise and fall of Jump Trading: the crypto bet of the hidden giant

In the early days, traders publicly bid prices in the trading hall by shouting, gesturing and jumping. This is also the inspiration for the name Jump Trading.

Jump Trading is headquartered in Chicago and was founded in 1999 by two former Chicago Mercantile Exchange (CME) floor traders, Bill DiSomma and Paul Gurinas. Jump quickly developed into one of the world's largest high-frequency trading companies, active in futures, options and stock exchanges around the world, and is also a major trader of U.S. Treasuries and cryptocurrencies.

In order to protect its trading strategy, Jump has always kept a low profile. In addition, market makers have always been hidden behind the scenes, and there is always a veil of mystery surrounding them. Jump rarely releases its financial data, and its founders have always kept their mouths shut about its operations. Since 2020, perhaps for the purpose of reducing exposure, Jump has adjusted its strategy and reorganized its business and no longer needs to submit 13F documents to the SEC. Instead, its parent company Jump Financial LLC continues to submit them. According to the latest 13F documents submitted by the latter, Jump Financial's asset management scale exceeds US$7.6 billion and the number of employees is about 1,600. In addition, Jump Trading has offices in the United States, Europe, Australia and Asia.

Jump Trading also has two sub-business units, Jump Capital and Jump Crypto.

Jump Capital

Jump Capital is headquartered in Chicago and was founded in 2012. Although Jump's encryption department was officially established in 2021, Jump Capital has been involved in encryption investment for a long time. Peter Johnson, one of its partners and heads of encryption strategy, revealed that the company has been secretly deploying encryption strategies for many years.

According to the relevant RootData page, Jump Capital has more than 80 crypto portfolios, mainly investing in DeFi, infrastructure and CeFi, and has invested in projects such as loTeX, Sei, Galxe, Mantle, and Phantom.

In July 2021, Jump launched its largest fund since its inception, with a total capital commitment of US$350 million, attracting 167 investors. This is Jump Capital's seventh venture fund.

Jump Crypto

In 2021, Jump completed the fundraising of its seventh investment fund and announced the establishment of its crypto investment department, Jump Crypto, and invested 40% of the seventh investment fund in the field of cryptocurrency, focusing on DeFi, financial applications, blockchain infrastructure, and Web 3.0 stocks and tokens.

Kanav Kariya, who was only 26 years old, became the first president of Jump Crypto in 2021. Kariya joined Jump Trading as an intern in early 2017, and he was assigned by the company to build early cryptocurrency trading infrastructure.

Related reading: "Deep Digging into Jump's Past: Internship Promoted to President in 4 Months"

In May 2021, Terra's algorithmic stablecoin UST decoupled for the first time. In the following week, Jump secretly purchased a large amount of UST to create the illusion of booming demand and pull the value of UST back to $1. This transaction made Jump earn $1 billion, and its proposer Kariya was quickly promoted to president of Jump Crypto four months later.

But this secret transaction also laid the groundwork for Jump's fall from the altar.

With the complete collapse of Terra UST stablecoin in 2022, Jump faces criminal charges for cooperating with Terra to manipulate the price of UST. In the same year, Jump suffered heavy losses in the bankruptcy of FTX due to its deep binding with FTX and Solana ecosystems.

After the FTX incident, the United States tightened its regulation of the crypto market, and Jump Trading was reported to be forced to scale back its business and gradually withdraw from the US crypto market. For example, Robinhood stopped its partnership with Jump after the FTX incident. Jump Crypto's subsidiary Tai Mo Shan was once one of Robinhood's largest market makers and was responsible for handling Robinhood's billions of dollars in daily trading volume. However, since the fourth quarter of 2022, Robinhood's financial reports no longer mention Tai Mo Shan, and Robinhood has turned to cooperate with market makers such as B2C2.

In addition, in order to scale back its cryptocurrency business, in November 2023, Jump Crypto officially split Wormhole out, and Wormhole's CEO and COO and others left Jump Crypto. The number of people in the Jump Crypto team was also almost halved during this period.

Jump Crypto's investment number after 2023 has also decreased significantly. According to the relevant RootData page, Jump Crypto's crypto investment portfolio has exceeded 90, mainly investing in infrastructure and DeFi, and has invested in projects such as Aptos, Sui, Celestia, Injective, NEAR, and Kucoin. But its "investment rounds in the past year" are only in the single digit.

On June 20, 2024, according to Fortune, the U.S. Commodity Futures Trading Commission (CFTC) is investigating Jump Crypto. A few days later, Kanav Kariya, who had worked at Jump Trading for six years, announced his resignation.

A month later, Jump Crypto started a large-scale ETH sell-off. Within 10 days, Jump Crypto's cumulative ETH sell-off value exceeded $300 million. The panic directly led to the market decline on August 5, 2024, with Ethereum's largest single-day decline exceeding 25%. The community speculated that Jump Crypto's sell-off of ETH may be due to the pressure of the CFTC investigation, in exchange for stablecoins to exit the cryptocurrency business at any time. Jump Crypto was once rumored to be "this big guy is going to fall."

Related reading: "Accused of Collapsing the Market, Exposing Crypto Market Maker Jump Crypto"

In December 2024, Jump Crypto's subsidiary Tai Mo Shan agreed to pay approximately $123 million to settle with the US SEC. According to the SEC's later indictment documents, it was Tai Mo Shan that participated in Terra's UST market making. It is reported that Tai Mo Shan is registered in the Cayman Islands and was established to handle specific market making and cryptocurrency trading business.

The incident between Jump and Terra seems to have finally settled after more than three years of painful entanglement.

Jump fully resumes its encryption business: is it a king's return or is it too late to turn back?

Why did Jump choose to fully resume its encryption business at this time?

In addition to Jump's judicial settlement of the Terra incident, a more critical reason is the Trump administration's friendly attitude towards cryptocurrencies.

Just two days ago, on March 5, Cumberland DRW, the crypto division of Jump's old rival DRW in Chicago, signed a joint application with the U.S. Securities and Exchange Commission (SEC) to withdraw the lawsuit filed by the SEC against it. The agreement was agreed in principle by both parties on February 20 and is currently awaiting approval from the SEC committee. The SEC sued Cumberland DRW in October last year, accusing it of operating as an unregistered securities dealer and selling more than $2 billion in unregistered securities.

The new leadership of the SEC has adopted a more tolerant release policy for crypto companies, and this attitude has given Jump hope of a comeback. In addition, the possibility of Solana and other altcoin spot ETFs being approved this year has made Jump Crypto, which is deeply involved in the Solana ecosystem, want to get a piece of the pie.

At the end of 2023, Jump had negotiated with BlackRock on "making markets for Bitcoin spot ETFs", but perhaps due to regulatory issues, Jump Crypto did not participate in the market making of Bitcoin and later Ethereum spot ETFs.

Jump still has the strength to make a comeback

A lean camel is bigger than a horse. Jump Trading still holds about $677 million in on-chain assets, of which Solana tokens account for nearly half of the holdings, or 47%, and hold 2.175 million SOLs. The second largest share is stablecoins, which account for about 30%.

Source: ARKHAM

Jump Trading's on-chain funds holdings are still the largest among several crypto market makers. As of March 8, 2025, the comparison of Jump's holdings with other market makers is ranked from high to low: 1. Jump Trading: US$677 million 2. Wintermute: US$594 million 3. QCP Capital: US$128 million 4. GSR Markets: US$96 million 5. B2C2 Group: US$82 million 6. Cumberland DRW: US$65 million 7. Amber Group: US$20 million 8. DWF Labs: US$100 million 10,000 US dollars

In addition to the size of funds, Jump also has a series of technical advantages. Taking the deep participation in Solana ecology as an example, Jump currently participates in Solana ecology through various forms such as technology development (developing Firedancer verification client, providing technical support for Pyth Network and Wormhole), investment (Jump has invested in multiple Solana ecological projects), and market making. The samples provided by Jump for the construction of Solana ecosystem may bring more cooperation to it.

But from another perspective, Solana's decentralization is weakened by Jump's dominant position.

Haunted by black history, Jump is afraid of being unable to turn back

Jump has a halo, but there are also many black histories.

It is not difficult to see from Terra's UST incident that Jump Crypto's market-making style in the crypto market is extremely barbaric. Although market makers are openly earning the difference from transactions, it is not uncommon in the crypto industry to collude with project parties to pull the market in exchange for huge income such as options.

In the traditional financial industry, market making is a strictly controlled business, and supervision needs to ensure that there is no conflict of interest. Market makers do not work directly with companies that issue stocks, but with exchanges under the supervision of regulators. Different businesses such as market making and venture capital are usually physically separated to avoid any possibility of insider trading or market manipulation.

A researcher once accused Jump of working with Alameda to push up Serum's fully diluted valuation to cut leeks, but the matter was quickly dropped. In addition, last October, video game developer FractureLabs filed a lawsuit against Jump Trading in the U.S. Federal Court in Chicago, accusing it of fraud and deception by manipulating the price of DIO tokens. FractureLabs originally planned to issue DIO tokens for the first time on the Huobi (now renamed HTX) exchange in 2021 to raise funds. The company hired Jump Trading as a market maker for DIO and lent 10 million tokens to its subsidiary, while sending 6 million to HTX for sale. However, Jump Trading systematically liquidated DIO holdings, causing the token price to fall to about 0.5 cents and pocketing millions of dollars in profits. Subsequently, Jump repurchased about $53,000 in tokens at a significant discount and returned them to FractureLabs, and then terminated the market maker agreement. At present, there is no further news on this lawsuit. Although Jump Crypto and Jump Trading and other departments are independent on the surface, in actual operation, there is a clear conflict of interest between the businesses of these departments. The inability to distinguish the boundaries between market makers' venture capital business and trading business is directly related to the lack of clear supervision in the crypto industry. To some extent, this is not the style of a specific market maker, but the style of market makers in general in the industry, such as Alameda in the past and DWF today. In traditional finance, market making is strictly controlled. Market makers do not work directly with companies that issue stocks, but with exchanges under the supervision of regulators. To avoid insider trading or market manipulation, different businesses such as market making and venture capital are usually physically separated.

Yesterday, GPS token market makers added unilateral liquidity to the exchange, causing the token price to plummet. The market making style and moral bottom line of market makers were once again discussed. @Mirror Tang believes that market makers and project parties together constitute a shadow banking system. Project parties usually provide funds to market makers through unsecured loan credit lines, and market makers use this money to leverage market making, thereby enhancing market liquidity. In bull markets, this system can create huge profits, but in bear markets, it is easy to cause liquidity crises.

It is not yet certain whether Jump will resume its market making business for cryptocurrencies. But if the crypto community still has memories, perhaps it should be wary of Jump's new market making project.