Jump Crypto Under CFTC Investigation: Report
Jump Crypto, which is a Web3 infrastructure development and a cryptocurrency trading firm under Jump Trading Group could be facing investigation by the U.S. Commodity Futures Trading Commission (CFTC) as per some reports. Yet another dimension of this not-so-new problem or the regulatory scrutiny in the cryptocurrency sector is noted by the Commission.
CFTC Probes Jump Crypto’s Activities
The market watchdog is carrying out an investigation into the trading practices of a startup represented by the Chicago-based crypto firm while making the process as transparent as humanly possible. This probe is indicative of the appropriate regulatory oversight that aims to ensure compliance in the rapidly growing crypto industry.
Previous Actions by CFTC and SEC
The last few years have seen the CFTC and U.S. Securities and Exchange Commission (SEC) introduction of more stringent measures to control the cryptocurrency market. This has entailed the two regulatory agencies, initiation and conviction of certain prominent crypto exchanges and individuals. Some of the significant actions being taken are:
- The CFTC’s Suits: The CFTC has filed lawsuits against FTX and its former CEO Sam Bankman-Fried, Binance and its former CEO Changpeng Zhao, as well as KuCoin.
- SEC’s Charges: The SEC has scanned such exchanges and individuals as Binance, Terraform Labs and its former CEO Do Kwon, Coinbase, Kraken, and Bittrex. Additionally, the invitation of regulators to Bittrex and Bittrex and its managers as well as Ripple’s shares and examination of Ethereum 2.0 are confirmed.
Jump Trading’s Past Controversies
However, while it could not be officially proven, Jump Trading was understood as directly related to the failure of TerraUSD (UST) in 2021, which in turn was blamed for creating a crisis in the currency trade. At the middle of the year 2022, Terra was gone and its effect changed the global market. Moreover, Jump Crypto registered about $300 million in losses after the collapse of FTX in the same year.
Jump Crypto’s $10 Million Political Donation
The scrutiny involving CFTC investigation pronouncedly kicked off just the other day, after Jump Crypto invested $10 million in an American political action committee (PAC), whose objective is to give a seat to those the crypto industry is friendly to Congress. With this donation, the contribution figure of Jump Crypto to the PAC, Fairshake, is now at $15 million. Fairshake has collected a jaw-dropping $169 million, it still has not utilized some of the finances which show $109 million in the last filings so they are still in possession of them.
Some other major suppliers to Fairshake are known to be Coinbase, Ripple, and Andreessen Horowitz (a16z) which indicates that the stakes were high and these important financial actors were very much involved in the crypto sector to set the regulations of the future.
Conclusion
The ongoing CFTC investigation into Jump Crypto is a clear pointer to the heightened scrutiny that the cryptocurrency sector faces from the regulatory authorities. As the enforcement bodies, for example, CFTC and SEC continue their efforts aimed at eradicating any potentially illegal activities, it is more likely for the crypto industry to be subject to similar regulator investigations in the future.
