Jump Trading Unit Fined In Crypto Inquiry

Jump Trading Group was a big winner during the last crypto bull market. Now, a unit of the high-speed trading giant has agreed to pay $123 million to settle an investigation stemming from its dealings with disgraced crypto tycoon Do Kwon.

- ALEXANDER OSIPOVICH

The unit, Tai Mo Shan, negligently misled investors about the stability of TerraUSD, a socalled stablecoin that imploded in 2022, hurting thousands of investors around the world, the Securities and Exchange Commission alleged in a settlement last week. Stablecoins are digital currencies designed to maintain a price of $1.

Kwon, the creator of the failed stablecoin, has been charged with fraud by New York federal prosecutors over the $40 billion crash of TerraUSD and a related token, Luna. He is in detention in the Balkan country of Montenegro as both the U.S. and his native South Korea seek his extradition. Kwon has denied committing fraud.

"While we remain deeply frustrated with the SEC's unprecedented regulation-by-enforcement approach to the digital asset industry, we are nonetheless pleased to resolve this matter," a Jump representative said.

Tai Mo Shan didn't admit wrongdoing. Named after the highest peak in Hong Kong, the unit was previously one of the main vehicles through which Chicago-based Jump did business in the crypto markets. During the 2021-22 crypto frenzy, Jump executed digital-currency orders for Robinhood Markets and invested in dozens of blockchain startups.

Now, crypto is rallying again. As prices for bitcoin and other digital currencies have surged since the victory of President-elect Donald Trump, investors are piling back into the volatile crypto markets. Jump's story shows how many of the profits from crypto accrue to sophisticated trading firms, rather than ordinary investors.

The SEC has previously said in court filings that Jump made approximately $1 billion in profit by selling Luna, a token that acted like stock in Kwon's crypto projects. Luna, once a popular token with small investors, plunged by more than 99% in a few days in May 2022.