Original author: Nianqing, ChainCatcher
Last August, a rapid and massive 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 “this big guy” Jump intensified.
In the six months that followed, the few pieces of news about Jump almost all revolved around internal and external lawsuits and legal battles.
Recently, CoinDesk quoted people familiar with the matter as saying that Jump is currently fully resuming its cryptocurrency business. Jump Tradings 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 when appropriate.
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, and later officially established its crypto business unit Jump Crypto in 2021.
However, a gambling game 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 gamble of a secretive giant
In the early days, traders shouted, gestured and jumped in the trading hall to publicly bid prices. 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 grew into one of the worlds largest high-frequency trading companies, active in futures, options and stock exchanges around the world, and is also a major trader in 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 around them. Jump rarely releases its financial data, and the founder has kept its mouth 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 13 F documents to the SEC. Instead, its parent company Jump Financial LLC continues to submit them. According to the latest 13 F documents submitted by the latter, Jump Financials asset management scale exceeds US$7.6 billion and the number of employees is approximately 1,600. In addition, Jump Trading has offices in the United States, Europe, Australia and Asia.
Jump Trading also has two sub-business units, namely Jump Capital and Jump Crypto.
Jump Capital
Jump Capital is headquartered in Chicago and was founded in 2012. Although Jumps crypto department was only officially established in 2021, Jump Capital has been involved in crypto investments for a long time. Peter Johnson, one of its partners and heads of crypto strategy, revealed that the company has been secretly deploying crypto strategies for many years.
According to the relevant RootData page, Jump Capitals crypto investment portfolio has exceeded 80, mainly investing in DeFi, infrastructure and CeFi, and has invested in projects such as loTeX, Sei, Galxe, Mantle, Phantom, etc.
In July 2021, Jump launched its largest fund since its inception, with a total capital commitment of US$350 million and attracted 167 investors. This is Jump Capitals seventh venture fund.
Jump Crypto
In 2021, while Jump completed the fundraising for its seventh investment fund, it announced the establishment of a 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 is only 26 years old, became the first president of Jump Crypto in 2021. Kariya joined Jump Trading as an intern in early 2017 and was assigned by the company to build the early cryptocurrency trading infrastructure.
In May 2021, Terras 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 deal also laid the groundwork for Jumps fall from grace.
With the complete collapse of Terra UST stablecoin in 2022, Jump faced 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 integration with the 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 U.S. crypto market. For example, Robinhood stopped its partnership with Jump after the FTX incident. Jump Cryptos subsidiary Tai Mo Shan was once one of Robinhoods largest market makers and was responsible for handling Robinhoods billions of dollars in daily trading volume. However, since the fourth quarter of 2022, Robinhoods financial reports no longer mention Tai Mo Shan, and Robinhood has turned to working with market makers such as B2C 2.
In addition, in order to reduce its cryptocurrency business, Jump Crypto officially split Wormhole in November 2023, and Wormholes CEO and COO and others left Jump Crypto. The number of people in the Jump Crypto team was almost halved during this period.
Jump Cryptos investment number has also decreased significantly after 2023. According to the relevant RootData page, Jump Cryptos 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. However, its investment rounds in the past year are only in the single digits.
On June 20, 2024, Fortune reported that the U.S. Commodity Futures Trading Commission (CFTC) was 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 massive ETH sell-off. In 10 days, Jump Crypto sold more than $300 million worth of ETH. The panic directly led to the market decline on August 5, 2024, with Ethereums largest single-day decline exceeding 25%. The community speculated that Jump Cryptos selling of ETH might 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.
In December 2024, Jump Cryptos subsidiary Tai Mo Shan agreed to pay approximately $123 million to settle with the US SEC. According to the SECs subsequent accusation documents, it was Tai Mo Shan that participated in Terras 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 events between Jump and Terra seem to have finally come to an end after more than three years of painful entanglement.
Jump fully resumes its crypto business: a comeback or a difficult situation?
Why did Jump choose to fully resume encryption business at this time?
In addition to Jump’s legal settlement in the Terra incident, a more critical reason is the Trump administration’s friendly attitude toward cryptocurrencies.
Just two days ago, on March 5, Cumberland DRW, the crypto division of Jumps 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 reached in principle by both parties on February 20 and is currently awaiting approval from the SEC. 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 SEC leadership has adopted a more tolerant policy towards crypto companies, and this attitude has given Jump hope for a comeback. In addition, the possibility of altcoin spot ETFs such as Solana 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 negotiated with BlackRock about making a market for a Bitcoin spot ETF, but perhaps due to regulatory issues, Jump Crypto ultimately did not participate in the market making of Bitcoin and later Ethereum spot ETFs.
Jump still has the potential 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 (47%), holding 2.175 million SOL. The second largest holding is stablecoins, which account for about 30%.
Source: ARKHAM
Jump Tradings on-chain capital holdings are still the largest among several crypto market makers. As of March 8, 2025, Jumps capital holdings compared to other market makers are ranked from high to low:
1. Jump Trading: $677 million
2. Wintermute: $594 million
3. QCP Capital: $128 million
4. GSR Markets: $96 million
5. B2C 2 Group: $82 million
6. Cumberland DRW: $65 million
7. Amber Group: $20 million
8. DWF Labs: $10 million
In addition to the size of funds, Jump also has a series of technical advantages. Taking the deep participation in the Solana ecosystem as an example, Jump currently participates in the Solana ecosystem through various forms such as technology development (developing the 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 the Solana ecosystem may bring more cooperation to it.
But to put it another way, Solana’s decentralization is weakened by Jump’s dominance.
Haunted by its dark history, Jump is worried about its future
Jump has a halo, but it also has a lot of dark history.
The Terra UST incident shows that Jump Crypto’s market-making style in the crypto market is extremely barbaric. Although the market maker’s apparent income is the difference between transactions, it is not uncommon in the crypto industry to collude with project parties to pull up 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 work 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 Serums fully diluted valuation to cut leeks, but the matter soon came to nothing. 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. But 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 departments such as Jump Crypto and Jump Trading are independent on the surface, in actual operation, there are obvious conflicts 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 general market makers in the industry, such as Alameda in the past and DWF today. In traditional finance, market making is strictly controlled, and 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 brought up for discussion. @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 cryptocurrency market making business. But if the crypto community still has memory, it should be wary of Jump’s new market making project.
