FractureLabs, a game developer, has taken legal action against Jump Trading. They accuse the firm of manipulating the price of the DIO token back in late 2021. Jump Trading is a well-known financial trading company in the U.S. that specializes in algorithmic trading and has made significant investments in the crypto market.
According to a Bloomberg report, FractureLabs aimed to raise funds through an initial token offering for Decimated (DIO) on the Huobi exchange in 2021. They brought Jump Trading on board as their market maker.
In their complaint, FractureLabs claims that Jump Trading promised to keep the price of DIO within a certain range. But what happened? The token’s price shot up to nearly $1 before plummeting to just $0.006 over the next year. This led FractureLabs to accuse Jump Trading of using pump-and-dump tactics for profit.
The price chart for DIO reveals a steady decline since early 2022, showing no signs of recovery. The lawsuit states, “Jump then systematically liquidated its DIO holdings, generating millions of dollars in revenue for itself.”
FractureLabs also mentioned that they lent Jump Trading 10 million DIO tokens and sent 6 million tokens to the Huobi exchange as part of their agreement. At the time, those 10 million tokens were worth $9.8 million. But when Jump Trading returned them, their value had dropped to around $53,000.
On top of this, the U.S. Commodity Futures Trading Commission (CFTC) is also investigating Jump Trading’s activities related to cryptocurrency trading and investments.
Jump Trading’s subsidiary, Jump Crypto, focuses on investments in the crypto market. However, data from CryptoRank shows that the company’s investment activities have been quite limited over the past two years.
While Jump Trading initially found success with investments in projects like Solana and Lido, they have faced challenges as well. Notably, they struggled with their investments in TerraUSD and Wormhole.