WEB3
by BSCN
June 20, 2024
The probe follows a tumultuous period for Jump Crypto, marked by significant involvement in the crypto market, a series of hacks, and controversies.
The US Commodity Futures Trading Commission (CFTC) launched an investigation on the trading firm Jump Crypto, according to a June 20 Fortune report. This investigation involves examining Jump's trading and investment activities in the cryptocurrency sector.
The CFTC's investigation does not imply wrongdoing. It is a standard regulatory procedure to ensure compliance with trading laws and regulations.
Worth noting, Jump Crypto emerged as a top market maker and venture investor, developing key projects like Wormhole, Pyth, and Firedancer.
Despite its early success, Jump faced significant challenges. In 2022, Wormhole, a decentralized finance platform, suffered a $325 million hack. Jump promptly covered the loss, showcasing its financial strength.
However, the collapse of FTX later that year revealed Jump as a major market maker on the exchange, incurring losses of nearly $300 million.
Jump's troubles continued with the SEC's lawsuit against Terraform Labs and founder Do Kwon over the failed TerraUSD stablecoin. The SEC accused Terraform of fraud and revealed that Jump had secretly supported Terra's peg during a near-collapse in 2021.
Although Jump was not charged, it was implicated in the controversy, and a former Jump employee testified against Terraform.
In March 2023, the Justice Department filed a criminal case against Do Kwon, mentioning Jump as a firm that helped maintain Terra's peg. Again, Jump was not charged but remained under scrutiny.
The CFTC and the U.S. Securities and Exchange Commission (SEC) have intensified their focus on cryptocurrency firms, bringing several enforcement actions over the past year.
While the CFTC regulates derivatives markets, the SEC regulates securities. Both agencies aim to ensure that crypto entities comply with U.S. laws.
Disclaimer
Disclaimer: The views expressed in this article do not necessarily represent the views of BSCN. The information provided in this article is for educational and entertainment purposes only and should not be construed as investment advice, or advice of any kind. BSCN assumes no responsibility for any investment decisions made based on the information provided in this article. If you believe that the article should be amended, please reach out to the BSCN team by emailing [email protected].
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