Kanav Kariya, the president of Jump Crypto, has announced his resignation amid widespread reports of a pending Commodity Futures Trading Commission (CFTC) investigation. In a social media post on June 24, Kariya stated he plans to focus on personal relationships and reading while he searches for his next venture. Reflecting on his tenure at Jump Crypto, he described the past years as “eventful.”

Jump Crypto’s Troubles Begin

Jump Crypto, the digital asset subsidiary of Jump Trading, has faced significant challenges since early 2022. In February 2022, hackers exploited the Wormhole bridge, a project owned by Jump Crypto, and fraudulently minted 120,000 wrapped Ethereum tokens (wETH). These were redeemed for Ether (ETH) and other tokens on the Solana blockchain. Jump Crypto assumed responsibility for the $321 million in damages by depositing an equal number of Ether tokens into the bridge.

In May 2022, the collapse of the Terra ecosystem added to Jump Crypto’s woes. An investor lawsuit alleged that Jump Crypto coordinated with Terra founder Do Kwon to manipulate the price of Terra’s UST stablecoin, aiming to maintain its U.S. dollar peg. The lawsuit claimed Jump Crypto profited $1.3 billion from this manipulation and benefited from receiving LUNA tokens at a significant discount, sometimes as much as 99% below market price.

Concerns Over FTX Exposure

Later in 2022, concerns arose regarding Jump Crypto’s exposure to the failing FTX exchange. Company spokespeople reassured investors, asserting that Jump Crypto was one of the most well-capitalized and liquid firms in the crypto industry and denied any plans to shut down.

The CFTC Investigation

The exact scope of the CFTC investigation into Jump Crypto remains unclear. However, it may include the trading activities mentioned in the investor lawsuit and the Securities and Exchange Commission’s case against Terraform Labs. It’s important to note that the investigation is not an indication of guilt or wrongdoing, as the CFTC has yet to make any findings.

As Kariya steps down, the future direction of Jump Crypto remains uncertain. The firm will need to navigate these legal and regulatory challenges while rebuilding trust and stability within the cryptocurrency community.