Crypto Podcast Host: Jump Trading may exit Web3 development business, not trading arm

Amidst reports of high-frequency trading giant Jump Trading's cryptocurrency division, Jump Crypto, liquidating a large amount of ETH holdings leading to significant market volatility, speculations are escalating. Jonah Van Bourg, host of the 1000x cryptocurrency podcast, suggested that the company may have shut down its Web3 development business.

US stocks opened higher but turned lower, as Jump Trading continues to liquidate, causing ETH to drop to $2,300

Is Jump Trading Really Exiting the Crypto Market?

Facing rumors of Jump Trading exiting the cryptocurrency market and selling assets at a precarious time, Van Bourg stated that most on-chain monitoring teams have already confirmed this assumption.

Arthur Hayes: Heard that a big player is going down, selling all the coins

He pointed out that Jump Crypto's operations mainly focus on:

• Trading: including high-frequency trading (HFT), over-the-counter market-making, event-driven exposure trading, providing liquidity for new tokens, etc.
• Web3 Development: providing technical support and development services to crypto projects and receiving potential high returns in project tokens

Jump has indeed put a lot of effort into the "Web3 Development" business, promoting a rookie intern to the CEO position, and plastering his beard all over the crypto market.

He believes that the promotion centered around Jump Crypto CEO Kanav Kariya has been effective:

What he wants to convey is that we come with an enviable office, stability of traditional finance, and brand attractiveness to collaborate with your project and receive a large amount of project tokens.

He added, "He succeeded, Jump became a big winner in 2021, but then collapsed."

Setbacks on the Crypto Journey

Van Bourg also mentioned potential reasons for Jump Crypto's possible exit:

Our bearded warrior was defeated by the Luna incident, followed by the Wormhole, FTX, and then the CFTC incident, ultimately leading to dismissal.

Unable to withstand CFTC investigation? Through Wormhole, Terra incidents, Jump Crypto leader resigns

In fact, in the year following Kariya's appointment, Jump Crypto did indeed face many troubles.

• Wormhole: In February 2022, the cross-chain bridge Wormhole supported by Jump Crypto was hacked, resulting in a loss of over $300 million, which the company covered out of pocket.
• Terraform Labs: In May of the same year, Jump Crypto, as a major investor in Terraform Labs, suffered significant losses during the collapse of the Terra ecosystem and faced criminal charges alleging collusion with Terra founder Do Kwon in manipulating UST prices.
• FTX: In November of the same year, the FTX collapse also affected Jump Crypto and its parent company Jump Trading, resulting in losses of up to $280 million as institutional investors in FTX.
• CFTC: In June of this year, it was reported that the CFTC was investigating Jump Crypto's involvement in cryptocurrency to understand if there was any misconduct.

Last month, Jump Trading was also reported to have filed a claim of up to $264 million through its subsidiary Tai Mo Shan against the defunct exchanges FTX and Alameda for the non-delivery of 800 million SRM tokens as per the contract, raising suspicions of a possible funding shortfall.

Jump Trading May Close Web3 Development Business

Finally, Van Bourg speculated that Jump Trading revealed the truth by dismissing frontline personnel, stating that Kariya is unlikely to be responsible for the company's trading department but more likely to serve as a mascot for its Web3 development department:

Anyone who has heard him speak knows that he knows almost nothing about trading, and is more likely a mascot for "Web3 Development Business" to make the company appear warmer and more approachable, to entice protocol founders to surrender more tokens.

He speculated that Jump may have completely exited the "Web3 Development Business":

That's why you see them selling crypto assets online, while their regular trading department, including cryptocurrencies, continues to operate normally and earn significant profits.