According to Fortune, US federal regulators are investigating Jump, a Chicago-based trading firm, over its cryptocurrency operations. The Commodity Futures Trading Commission (CFTC) is reportedly looking into Jump’s trading and investment activities. Jump, renowned for its algorithmic and high-frequency trading strategies, launched its crypto arm, Jump Crypto, in September 2021. Since then, it has actively participated in the market, supporting projects like Wormhole, Pyth, and acting as a validator client for Solana (SOL).
However, Jump has faced challenges. It was a primary market maker for FTX exchange, suffering losses close to $300 million during the exchange’s collapse in late 2022. Additionally, it was involved in controversies such as the one with Terraform Labs, linked to the failed TerraUSD stablecoin, amid accusations of undisclosed support for Terra’s peg.
While the US Securities and Exchange Commission (SEC) did not charge Jump when it took action against Terraform Labs and its founder Do Kwon, the trading firm has since reduced its crypto activities. It even opted not to proceed with a spot Bitcoin (BTC) exchange-traded fund.
Fortune notes that the CFTC’s investigation into Jump’s crypto involvement does not imply wrongdoing, although it remains unclear whether charges may be forthcoming.
