CFTC’s Jump Trading Investigation Is Now Ongoing With Wormhole Hacking Suspicions

Key Points:

• Jump Trading is under CFTC investigation for its cryptocurrency activities.
• The CFTC’s Jump Trading investigation follows Jump’s involvement in significant events such as the Wormhole hack and losses related to the collapse of the FTX exchange.

According to Fortune, the Commodity Futures Trading Commission (CFTC) is conducting an investigation into Jump Trading, a prominent Chicago-based firm, regarding its activities in the cryptocurrency sector.

CFTC’s Jump Trading Investigation Follows Suspicions About Crypto Activities

This CFTC’s Jump Trading investigation, which is standard procedure and not indicative of any wrongdoing, focuses on Jump’s trading and investment practices in digital assets, according to a source familiar with the matter.

Jump Trading gained renown for its expertise in algorithmic trading and emerged as a significant player in the crypto market, particularly through its division Jump Crypto. The division was involved in market-making across exchanges and venture investments in blockchain projects. However, Jump Crypto faced challenges, including its involvement in incidents like the Wormhole hack and losses related to the collapse of the FTX exchange.

Despite these setbacks, Jump remained active in the crypto space until scaling back operations recently, including spinning off certain projects and withdrawing from the race to launch a spot Bitcoin ETF.

Jump Crypto’s Political Donation Raises Regulatory Eyebrows

The CFTC’s Jump Trading investigation comes amidst broader scrutiny of cryptocurrency activities by federal agencies like the SEC and reflects a regulatory focus on ensuring compliance within the derivatives market, where Jump’s activities predominantly fall.

In related news, Jump Crypto made headlines for its political contributions, donating $10 million to the Fairshake political action committee (PAC). The contribution was part of Fairshake’s substantial fundraising efforts, totaling $169 million, aimed at influencing upcoming U.S. primaries. The PAC has garnered support from various crypto firms, including Coinbase and Ripple, as well as notable figures in the industry.