Crypto Firm Jump Faces CFTC Probe According to Report
The U.S. Commodity Futures Trading Commission (CFTC) is reportedly conducting an investigation into Jump Crypto, a company that specializes in cryptocurrency trading and Web3 infrastructure development and is affiliated with Jump Trading Group. Fortune magazine reported that the CFTC is also examining the investment activities of this Chicago-based crypto firm. Over the past two years, both the CFTC and the U.S. Securities and Exchange Commission (SEC) have initiated investigations and filed charges against various cryptocurrency exchanges, platforms, and individuals. The CFTC has taken legal action against FTX and its former CEO Sam Bankman-Fried, Binance and its former CEO Changpeng Zhao, and KuCoin. Similarly, the SEC has subjected prominent exchanges and individuals such as Binance, Terraform Labs and former CEO Do Kwon, Coinbase, Kraken, and Bittrex to intense regulatory scrutiny. The SEC also filed charges against Ripple and top executives of the company, and it recently concluded its investigation into Ethereum 2.0, with details of the investigation being shared by Consensys. In the case involving Terraform Labs, the SEC identified a U.S. trading firm that played an illegal role in supporting the depegging stablecoin TerraUSD (UST) in 2021. This firm was eventually revealed to be Jump Trading, and the collapse of Terra in mid-2022 caused a significant contagion effect on the cryptocurrency market. Jump Crypto also suffered substantial losses of nearly $300 million when FTX collapsed later that same year. The news of the CFTC’s investigation into Jump Crypto’s trading activities emerged on Thursday, just one day after the company made a $10 million donation to a U.S. political action committee (PAC) that aims to elect lawmakers who are supportive of cryptocurrencies to Congress. Jump Crypto has already contributed a total of $15 million to this PAC, which has received multimillion-dollar donations from industry giants such as Coinbase, Ripple, and Andreessen Horowitz (a16z). The super PAC, named Fairshake, has amassed an astonishing $169 million, and its most recent regulatory filings indicate that it still holds around $109 million.
