US CFTC Took Action: This Giant Cryptocurrency Company is the Target!

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. According to Fortune, the derivatives regulator is examining Jump Crypto’s crypto subsidiary for trading and investment.

CFTC is after Jump Crypto: What’s on its agenda?

According to Fortune, the US Commodity Futures Trading Committee (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. However, 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 past three years. Their activities were mostly with cryptocurrency projects. It also provided them with liquidity for their newly launched tokens. As the company climbed the ladder further, the incubation and engineering arm created helped develop some high-end projects such as Wormhole, Pyth and Firedancer.

cryptocurrencies Jump Crypto in the sector s the 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.com As 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. Separately, in the US SEC’s case against Terraform Labs and Do Kwon, the regulator identified a US trading firm that secretly supplemented Terra when it was 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, Jump’s activities in derivative products are concentrated around multiple cryptocurrencies and classical commodities. This overlaps significantly with the CFTC’s jurisdiction.

CFTC increases pressure on cryptocurrency market

The investigative push into Jump Crypto reflects the CFTC’s heavy-handed pursuit of regulatory violations. In May, CFTC Chairman Rostin Behnam announced that further crypto regulation through crackdowns should be expected within 6-12 months. Barely two months have passed since the announcement was made, and Jump Crypto is likely to face great pressure.