The CFTC and SEC have specialized in bringing charges against crypto-related entities over the past few years. In a way, the SEC brought Binance, the world’s largest cryptocurrency exchange, to its knees. However, it has also acknowledged the existence of the crypto world with spot Bitcoin and Ethereum ETF approvals. Along with the SEC, the CFTC is also pursuing cryptocurrency companies. The derivatives regulator is reviewing Jump Crypto’s crypto involvement, such as trading and investing, Fortune reported.
CFTC is after Jump Crypto: What’s on its agenda?
According to Fortune, the U.S. Commodity Futures Trading Commission (CFTC) is concerned about Jump Crypto’s involvement in crypto, specifically digital asset trading and investment activities. So far, there is no evidence of wrongdoing. But for a very long time, Jump Crypto has been involved in several hacks and explosions. This forced the company to pull back on its crypto efforts, including withdrawing from the spot Bitcoin ETF race.
Jump founded its cryptocurrency division in September 2021 after establishing itself as an expert in algorithmic trading. The financial institution has served as the top market maker on the exchanges for the last three years. Their activities were generally related to cryptocurrency projects. It also provided them with liquidity for their newly launched tokens. As the company climbed further up the ladder, the incubation and engineering arm created helped develop some high-profile projects such as Wormhole, Pyth, and Firedancer.
cryptocurrenciesJump Crypto in the sector sthe drifts
However, Jump Crypto’s troubles began with several cracks in its operations, including the $325 million hack of Wormhole, a decentralized finance platform. cryptokoin.comAs you follow from , it turns out that with the explosion of FTX in 2022, the market marker of the Bahamian exchange lost up to $ 300 million. Additionally, in the US SEC’s case against Terraform Labs and Do Kwon, the regulator identified a US trading firm that secretly supported Terra’s near-collapse.
As a result of the investigation, it was revealed that the company in question was Jump Crypto. Terraform Labs and Kwon were charged and reached a settlement. However, the discovery did not turn into a lawsuit for Jump. This may be due to jurisdictional restrictions. The SEC’s responsibility is primarily to police securities. However, most of Jump’s activity in derivatives centers around cryptocurrency products and traditional commodities. This overlaps significantly with the CFTC’s jurisdiction.
CFTC increases pressure on cryptocurrency market
The investigative move on Jump Crypto reflects the CFTC’s intense effort to combat regulatory violations. In May, CFTC Chairman Rostin Behnam announced that further crypto regulation through crackdowns should be expected within 6-12 months. It has been barely two months since the announcement was made and Jump Crypto is likely to face a lot of pressure.
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