Author: Nian Qing, ChainCatcher

Last August, a sudden and massive sell-off by Jump Trading pushed the crypto market into the abyss, further triggering the "August 5th crash". At the time, rumors about Jump, "the big guy", going down were rampant.

In the following half year, the few news about Jump mostly revolved around its internal and external lawsuits and litigation.

Recently, CoinDesk reported, citing informed sources, that Jump is currently fully restoring its cryptocurrency business. The Jump Trading website shows that Jump is hiring a batch of cryptocurrency engineers for its offices in Chicago, Sydney, Singapore and London. Additionally, another informed source added that Jump plans to start replenishing US policy and government liaison positions at the appropriate time.

Jump was once called the "absolute monarch" of the trading world. Relying on its ultra-low latency trading system and complex algorithmic design, Jump was one of the key liquidity providers in traditional finance. As the scale of the crypto market continued to expand, Jump began to make a market in cryptocurrencies and invest in crypto projects, and later formally established the cryptocurrency business department Jump Crypto in 2021.

However, a gamble that accompanied the birth of Jump Crypto also sowed the seeds of its later tragedy.

The Rise and Fall of Jump Trading: The Crypto Gamble of a Secretive Giant

In the early days, traders in the trading hall openly quoted prices through shouting, gestures and jumping. This was also the inspiration for the name Jump Trading.

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

Due to the protection of its trading strategies, Jump has always maintained a low profile, and as a market maker, it has always been hidden behind the scenes, always shrouded in a mysterious veil. Jump rarely discloses its financial data, and the founders have always been tight-lipped about its operational status. Since 2020, perhaps to reduce exposure, Jump has adjusted its strategy and business restructuring, no longer needing to file 13F reports with the SEC, instead having its parent company Jump Financial LLC continue to file. According to the latest 13F filing by the latter, Jump Financial's assets under management exceed $7.6 billion, with about 1,600 employees. In addition, Jump Trading has offices in the US, Europe, Australia and Asia.

Jump Trading also has two subsidiary business departments, Jump Capital and Jump Crypto.

Jump Capital

Jump Capital is headquartered in Chicago and was established in 2012. Although Jump's cryptocurrency department was not officially established until 2021, Jump Capital has been involved in cryptocurrency investments for many years. One of its partners and heads of cryptocurrency strategy, Peter Johnson, revealed that the company has been secretly deploying cryptocurrency strategies for many years.

According to the relevant RootData page, Jump Capital's cryptocurrency investment portfolio has exceeded 80, 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 $350 million, attracting 167 investors, which is Jump Capital's 7th venture fund.

Jump Crypto

In 2021, while completing the fundraising for its seventh investment fund, Jump announced the establishment of the cryptocurrency investment department Jump Crypto, and allocated 40% of the seventh investment fund to the cryptocurrency field, focusing on directions such as DeFi, financial applications, blockchain infrastructure and Web 3.0 stocks and tokens.

26-year-old Kanav Kariya 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, when Terra's algorithmic stablecoin UST first experienced depegging, Jump secretly purchased a large amount of UST within the following week to create the illusion of thriving demand and pull the value of UST back to $1. This transaction earned Jump $1 billion, and the proponent of the plan, Kariya, was quickly promoted to president of Jump Crypto just four months later.

But this secret transaction also sowed the seeds of Jump's downfall.

With the complete collapse of the Terra UST stablecoin in 2022, Jump faced criminal prosecution allegations for colluding with Terra to manipulate the UST price. That same year, Jump suffered heavy losses in the FTX bankruptcy due to its deep ties with FTX and the Solana ecosystem.

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

Furthermore, to reduce its cryptocurrency business, in November 2023, Jump Crypto officially spun off Wormhole, and the CEO and COO of Wormhole left Jump Crypto. The Jump Crypto team has also nearly halved in size during this period.

Jump Crypto's investment activities have also clearly decreased since 2023. According to the relevant RootData page, Jump Crypto's cryptocurrency 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 digits.

On June 20, 2024, according to a Fortune report, the US Commodity Futures Trading Commission (CFTC) is investigating Jump Crypto. A few days later, Kanav Kariya, who had been with Jump Trading for six years, announced his resignation.

A month later, Jump Crypto launched a large-scale ETH sell-off. Within 10 days, Jump Crypto had cumulatively sold over $300 million worth of ETH, with the panic directly leading to the market decline on August 5, 2024, with Ethereum seeing a single-day drop of over 25%. The community speculates that Jump Crypto's ETH sell-off may be due to the pressure of the CFTC investigation, in order to exchange for stablecoins and exit the cryptocurrency business at any time. Jump Crypto was once rumored to be "the big guy who is going to fall".

Related reading: "Accused of Crashing the Market, Digging into Crypto Market Maker Jump Crypto"

In December 2024, Jump Crypto's subsidiary Tai Mo Shan agreed to pay about $123 million to settle with the US SEC. According to the subsequent SEC indictment documents, Tai Mo Shan was the one involved in the market making of Terra's UST that year. It is reported that Tai Mo Shan is registered in the Cayman Islands, and was set up 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 Crypto Business: A Comeback of the King or a Difficult Return?

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

In addition to the legal resolution of Jump's Terra incident, a more critical reason is the crypto-friendly attitude of the Trump administration.

Just the other day, on March 5th, Jump's old rival in Chicago, the cryptocurrency division of DRW, Cumberland DRW, signed a joint application with the US Securities and Exchange Commission (SEC) to withdraw the SEC's lawsuit against it. The agreement was reached in principle on February 20th and is currently awaiting approval by the SEC Commission. The SEC sued Cumberland DRW last October, accusing it of operating as an unregistered securities broker-dealer and selling over $2 billion in unregistered securities.

The new SEC leadership has taken a more tolerant and permissive policy towards crypto companies, which has given Jump hope for a comeback. Furthermore, the possibility of Altcoin spot ETFs being approved this year, such as for Solana, has made Jump Crypto, which is deeply involved in the Solana ecosystem, want to get a piece of the pie.

By the end of 2023, Jump had negotiated with BlackRock on "market making for Bitcoin spot ETF", but perhaps due to regulatory issues, Jump Crypto ultimately did not participate in the market making of Bitcoin or the subsequent Ethereum spot ETF.

Jump Still Has the Strength to Make a Comeback

A dying camel is bigger than a horse. Jump Trading still holds about $677 million in on-chain assets, with Solana tokens accounting for nearly half at 47%, holding 2.175 million SOL. Stablecoins account for about 30% next.

Source: ARKHAM

The on-chain capital holdings of Jump Trading are still the largest among several crypto market makers. As of March 8, 2025, the ranking of capital holdings of Jump and other market makers from high to low is:

• 1. Jump Trading: $677 million
• 2. Wintermute: $594 million
• 3. QCP Capital: $128 million
• 4. GSR Markets: $96 million
• 5. B2C2 Group: $82 million
• 6. Cumberland DRW: $65 million
• 7. Amber Group: $20 million
• 8. DWF Labs: $10 million

In addition to the scale of capital, Jump also has a series of technical advantages. Taking its deep involvement in the Solana ecosystem as an example, Jump currently participates in the Solana ecosystem through technical development (developing the Firedancer validator client, providing technical support for Pyth Network and Wormhole), investment (Jump has invested in multiple Solana ecosystem projects), and market making. The samples Jump provides for the construction of the Solana ecosystem may bring more cooperation to it.

But from another perspective, Jump's dominant position has weakened the decentralization of Solana.

Plagued by a Dark History, Jump Fears a Difficult Comeback

Jump has a halo, but it also has a lot of dark history.

The UST incident of Terra clearly shows the extremely brutal market making style of Jump Crypto in the crypto market. Although market makers' nominal income is the spread from trading, colluding with project parties to pump the price in exchange for huge option income is not uncommon in the crypto industry.

In the traditional financial industry, market making is a business that is strictly controlled by regulations, and regulators need to ensure that there are no conflicts of interest. Market makers do not directly cooperate with the companies issuing the stocks, but cooperate with the exchanges under the supervision of the regulatory authorities, and the business of market making and venture capital are usually separated to avoid any possibility of insider trading or market manipulation.

A researcher once accused Jump of colluding with Alameda to inflate the fully diluted valuation of Serum to fleece the investors, but this matter was soon forgotten. In addition, in October last year, video game developer FractureLabs filed a lawsuit against Jump Trading in the U.S. District Court for the Northern District of Illinois, accusing it of fraud and deception by manipulating the price of the DIO token. FractureLabs originally planned to raise funds by issuing the DIO token on the Huobi (now renamed HTX) exchange in 2021. The company hired Jump Trading as the market maker for DIO and lent 10 million tokens to its subsidiary, while sending 6 million tokens to HTX for sale. However, Jump Trading systematically liquidated the DIO holdings, causing the token price to drop to about $0.005, and pocketed hundreds of millions of dollars in profits. Subsequently, Jump repurchased about $53,000 worth of tokens at a significant discount and returned them to FractureLabs, and then terminated the market making agreement. Currently, this lawsuit has not yet been followed up.

Although the Jump Crypto and Jump Trading departments are ostensibly independent, in actual operation, there is a clear conflict of interest between these departments. The inability to distinguish the boundaries between market making, venture capital business, and trading business is directly related to the lack of clear regulation in the crypto industry. To some extent, this is not the style of a specific market maker, but the general style of market makers in the industry, such as the former Alameda and the current DWF. In traditional finance, market making is strictly controlled, and market makers do not directly cooperate with the companies issuing the stocks, but cooperate with the exchanges under the supervision of the regulatory authorities. To avoid insider trading or market manipulation, different businesses such as market making and venture capital are usually separated.

Yesterday, a market maker for the GPS token added one-sided liquidity on the exchange, causing the token price to plummet, and the market making style and moral bottom line of the market maker were once again discussed. @Mirror Tang believes that project parties and market makers together form a shadow banking system. Project parties usually provide unsecured credit lines to market makers, and market makers use this capital to leverage market making, thereby enhancing market liquidity. In bull markets, this system can generate huge profits, but in bear markets, it is easy to trigger liquidity crises.

It is currently unclear whether Jump will resume its crypto market making business. But if the crypto community still has a memory, perhaps it should be vigilant about Jump's new market making projects.