Jump Crypto Appears to be Liquidating Millions in Crypto

Jump Crypto, the cryptocurrency arm of the Chicago-based proprietary trading firm Jump Trading, is transferring millions worth of digital assets to exchanges, which could be exacerbating selling pressure across crypto markets.

Data from blockchain analytics platform SpotOnChain indicates that in the past 24 hours alone, Jump Crypto has moved 17,576 ETH, or over $46.78 million, to exchanges like Binance, OKX, Coinbase, Bybit and Gate.io.

The latest transfers bring Jump Crypto’s total exchange deposits to $277 million worth of Ether over the past 10 days.

Since July 25, Jump Crypto has redeemed 83,091 wstETH (worth $341 million) into 97,600 stETH and unstaked 86,059 stETH ($274 million) from Lido Finance. The company then deposited a net amount of 72,213 ETH ($231 million) to various exchanges. Currently, Jump Crypto holds around $706 million in cryptocurrencies, including USDT, USDC, Bitcoin and others.

“The reason for the crazy crypto sell-off seems to be Jump Trading, who are either getting margin called in the traditional markets and need liquidity over the weekend, or they are exiting the crypto business due to regulatory reasons (Terra Luna related),” tweeted Dr. Julian Hosp, co-founder of DeFi platform Cake Group.

These potential asset sales come at a turbulent time for the crypto market. In the last 24 hours, 14% of the total market capitalization has been wiped out. Crypto prices are in freefall, with Bitcoin briefly dropping below $50,000 today.

Major DeFi tokens like Lido DAO, UNI, AAVE, and MKR are down between 20% to 30% in the last 24 hours.

“Jump liquidating their crypto book into thin markets on a summer Sunday afternoon perfectly sums up why their crypto operation is such a mess,” said Adam Cochran, VP of Operations at SBT Partners. “For a shop that’s spun out so many smart builders in this space, the operation always seems like a clusterf@#k.”

CFTC Investigation

In June, the Commodity Futures Trading Commission (CFTC) began probing Jump Crypto. The investigation is focused on the firm’s trading and investment activities, which include being deeply embedded in the crypto industry through its market-making and investing arms.

Launched in September 2021, Jump Crypto has faced setbacks, such as the $325 million Wormhole hack in 2022 and substantial losses from the FTX collapse. Recently, Jump was also named in the Securities and Exchange Commission’s (SEC) lawsuit against Terraform Labs, although it was not charged with any wrongdoing.

“This big, sloppy range in the majors is really due to massive supply changing hands from last cycle (and longer ago) problems – FTX estate, Mt Gox, Germany, GBTC and now Jump, plus new project unlocks/tokens,” tweeted Raoul Pal, CEO of Real Vision.