From a crypto-quant giant to an infrastructure hermit, Jump Crypto's "redemption-style" transformation

Author: Nancy, PANews

Jump Crypto, a high-frequency trading giant that was once at the center of controversy, quietly withdrew from the market amid a series of violent storms. Now, this secretive force that once dominated on-chain liquidity is trying to return to the center of the stage with a new identity as a "crypto infrastructure builder."

Recently, Jump made its first high-profile statement, announcing its comprehensive transformation into a core promoter of on-chain infrastructure. It also rarely disclosed the progress of its participation in US encryption policy lobbying, attempting to rebuild market trust in the new encryption cycle through technological innovation and regulatory cooperation.

Transformed into an infrastructure builder and participated in the US encryption policy lobbying for the first time

On June 20, Jump Crypto, which has been keeping a low profile for a long time, made a rare statement and officially announced that it would reintroduce itself to the world as a "crypto infrastructure builder." The company, regarded as one of the largest participants in crypto trading, is transforming from a behind-the-scenes trading giant to a core promoter of on-chain infrastructure.

In a public statement released on the official website, Jump Crypto recalled that in the past few years, it has kept a low profile but never stopped building. The team has always focused on identifying and breaking through the core bottlenecks that restrict the performance and scalability of encryption systems. "We don't sit in an ivory tower and talk about the future ten years later; we start with the hardest bones to chew. History tells us that construction itself breeds more construction." Jump wrote.

Jump emphasized its core contributions in multiple projects such as Pyth, Wormhole, Firedancer, DoubleZero, etc., and said that although these projects have different technical directions, they all originated from the technical limitations that Jump encountered in real transactions on the chain. It is this path of "construction driven by transactions" that has enabled the Jump team to evolve from a liquidity provider to a key promoter of crypto infrastructure.

However, Jump also repeatedly emphasized in the statement that despite playing a core contributor role in multiple infrastructure projects, it never has control over these networks. "We firmly believe that the essence of decentralization is that no single entity has 'unilateral control'. Therefore, the protocol we built is not only open source, but also completely open source and can be freely forked. In our view, there can be many ways to decentralize (validators, token governance, etc.), but the core judgment standard is always: Is there the ability to unilaterally modify the protocol?"

At the same time, Jump has also laid out security infrastructure, including its self-developed self-hosted wallet operating platform Cordial Systems, which can provide enterprise-level digital asset wallet solutions for Jump and multiple centralized exchanges; the internally incubated security team Asymmetric Research has helped recover more than US$5 billion in potential risks and handled more than 100 security incidents.

It is worth noting that Jump’s high-profile statement this time is not only a “clarification” of its role, but also the first time it has actively participated in advising on regulatory policies. In the past few decades, Jump’s parent company, Jump Trading, has almost never appeared in the field of public policy. Jump Crypto submitted a policy opinion letter to the US SEC last month, which is also the first time in the history of its parent company Jump Trading that it has publicly stated its position on public policy, sharing their views on how US securities laws can adapt to the digital asset era, and calling for the introduction of common-sense reforms to eliminate the regulatory ambiguity and uncertainty widely felt in the industry.

"Now is the best window of opportunity to reconstruct financial infrastructure and even organizational coordination methods. Not only the maturity of technology, but also the policy changes have brought the industry to a critical turning point," Jump pointed out.

After multiple crises, the company is seriously injured and is seeking a comeback after the US regulation warms up.

Jump Crypto was once the flagship force of the Wall Street quantitative legend Jump Trading in its layout of the crypto world. However, since it was caught up in a series of turmoil including the UST manipulation controversy, the FTX bankruptcy crisis, and the Wormhole hacker attack, this high-frequency trading giant active on the crypto front has faced a reputation crisis and financial pressure, and chose to gradually fade out of the industry spotlight.

Jump's real reputation crisis began with the collapse of the Terra ecosystem in 2022. According to the US SEC documents, Jump, through its wholly-owned subsidiary Tai Mo Shan Limited, reached an agreement with Terraform Labs during the first decoupling of UST in May 2021, using more than $20 million of its own funds to secretly purchase UST in an attempt to "artificially" stabilize its $1 anchor. In exchange, Jump obtained a large-scale discounted subscription right for LUNA. This arrangement greatly enhanced the market's illusion of UST's self-healing ability and misled the public's judgment on the effectiveness of its algorithmic mechanism.

The SEC alleged that Jump had actually acted as a legal underwriter of LUNA tokens from January 2021 to May 2022, illegally distributing securities in the U.S. market without registration. Jump made a cumulative profit of nearly $1.3 billion by buying at low prices and selling at high prices. Finally, at the end of 2024, Jump reached a $123 million settlement agreement with the SEC, which also revealed some of the operations of this mysterious trading giant in the deep waters of the crypto market.

The crisis did not stop at Terra. In February 2022, the Wormhole protocol of Certus One, a cross-chain bridge developer previously acquired by Jump, was hacked, resulting in a loss of up to $325 million, becoming one of the largest security incidents in the crypto industry at the time. In order to maintain the availability and confidence of the protocol, Jump chose to "pay out of its own pocket" to fill the loophole and invested $320 million to save the market. Although this move restored its short-term reputation, it also seriously eroded Jump's own funds.

The collapse of FTX has further exacerbated Jump's financial black hole. As an important market maker and strategic partner of FTX and its sister company Alameda Research, Jump not only deeply participated in the construction of its platform liquidity, but also made a heavy bet on the Solana ecosystem with it, and is one of the largest institutional participants in the Solana ecosystem. However, with the collapse of FTX, the price of the Solana project was halved, and the ecosystem collapsed in an instant, further exacerbating the tension on Jump's balance sheet. According to Michael Lewis's disclosure in the book "Going Infinite", Jump lost as much as $206 million in the collapse of FTX, and its subsidiary Tai Mo Shan also lost more than $75 million, totaling more than $300 million.

Faced with multiple blows, continued tightening of US regulation, and the arrival of the crypto winter, Jump Crypto quickly shrunk its front line, began to lay off employees, reduced its venture capital layout, and strategically withdrew from the US market, gradually fading from the public view of the crypto community. In the second half of 2024, Jump even sold off a large number of its mainstream assets such as ETH, USDC, and USDT, which once caused speculation from the outside world that it would completely withdraw from the crypto market.

Until March this year, as the US regulation gradually became clear, this disappeared "whale" showed signs of restarting. According to CoinDesk, citing people familiar with the matter, Jump is restoring its US cryptocurrency business to full operation. Although Jump has been maintaining digital asset trading and market making activities in other parts of the world, the current US crypto trading volume is accelerating. Jump is planning to recruit a group of crypto engineers and will start filling US policy and government liaison positions in due course.

It is worth noting that, judging from public information, Jump has begun to re-position its crypto venture capital layout this year. Since January this year, Jump has successively participated in the financing of at least six crypto projects, including Humanity Protocol, Momentum, Securitize, SOON and other infrastructure projects. This is the first time that Jump has resumed large-scale public investment in more than a year since October 2024, which also shows its determination to strategically transform into an on-chain infrastructure builder.