Jump Trading, a key figure in cryptocurrency trading, has officially made its Wormhole protocol a separate entity. This news, brought to light by Bloomberg News on November 17, cites informed sources and marks a significant shift in the company’s direction.
This separation from Jump Trading has led to the exit of important figures including Wormhole’s CEO, Saeed Badreg, and COO, Anthony Ramirez. They will take charge of Wormhole’s independent operations going forward.
As of this report, Jump Trading has not issued any public comments on this development.
2022 Hack: A Turning Point for Wormhole
This strategic separation follows the major security breach that Wormhole experienced in 2022. During this incident, hackers managed to siphon off about $320 million, or 120,000 ETH, placing it among the most significant hacks in the decentralized finance (DeFi) sector.
Jump Trading’s venture into Wormhole traces back to 2021, marked by the acquisition of Certus One, which included Wormhole Bridge. This acquisition set the stage for a partnership that preceded the 2022 hacking disaster.
Following the acquisition, Wormhole executives assumed key roles within Jump Trading. However, the hacking incident in 2022, resulting in a substantial financial loss, posed a significant challenge for the protocol.
Response to the Hack
In the wake of the hack, Jump Crypto, the cryptocurrency division of Jump Trading, quickly stepped in to replenish the stolen funds and launched an investigation to recover the losses. The success of these recovery efforts remains uncertain.
While it’s not clear if the hack influenced the decision to spin off Wormhole, the move is in line with Jump Trading’s broader strategy to limit its exposure to the crypto market, amid regulatory uncertainties in the U.S.
The report also highlights a notable downsizing at Jump Crypto, which has seen its workforce shrink by 50% from its peak of 150 employees in 2022.
Legal Entanglements with Terra
Beyond the Wormhole hack, Jump Crypto has faced additional scrutiny. Kanav Kariya, President of Jump Crypto, invoked the Fifth Amendment during an SEC deposition, a part of the lawsuit against Terraform Labs and its former CEO, Do Kwon. Kariya exercised his right against self-incrimination multiple times during this process.
The SEC’s lawsuit also hinted at an unidentified U.S. trading firm involved in manipulating the UST price, with speculations pointing towards Jump Trading as the possible firm.
These developments paint a complex picture for Jump Trading, navigating a challenging terrain in the crypto market amidst strategic changes and legal hurdles. The impact of these events on Jump Trading’s future operations and the broader cryptocurrency landscape remains to be seen.