Jump Trading accused of pump-and-dump scheme in DIO token lawsuit

FractureLabs, the developer of the online crippled “Decimated,” has filed a suit against Jump Trading. accusing the steadfast of marketplace manipulation, Bloomberg News reported connected Oct. 16.

The ailment alleges that Jump engaged successful a “pump and dump” strategy with the game’s autochthonal token, DIO, which is traded connected crypto markets.

Allegations

According to the filing, FractureLabs planned to rise funds done an archetypal offering of DIO connected HTX — formerly Huobi — and hired Jump arsenic a marketplace shaper successful 2021.

As portion of their agreement, FractureLabs loaned 10 cardinal DIO tokens to Jump’s subsidiary and sent 6 cardinal tokens to HTX for the sale.

After the token’s terms climbed to $0.98, Jump allegedly liquidated its holdings, causing DIO to clang to little than fractional a cent. The steadfast past repurchased the tokens astatine a fraction of the price, returned them to FractureLabs, and canceled its market-making contract.

FractureLabs asserts that Jump misrepresented its intentions and violated an statement to support the token’s terms wrong a specified scope nether Huobi’s listing conditions. As a result, HTX withheld astir of a $1.5 cardinal Tether (USDT) deposit made by FractureLabs, which the institution is present seeking done arbitration.

While HTX has declined to remark owed to ongoing litigation, it emphasized its committedness to operating wrong ineligible frameworks.

Past controversies

This is the latest contention involving Jump Crypto. In the suit moved by the US Securities and Exchange Commission (SEC) against Terraform Labs successful February 2023, the regulator stated its content that Jump was “instrumental” successful the downfall of the UST stablecoin, USTC.

Although Jump is not a suspect successful the Terraform Labs case, the regulator stated that erstwhile UST mislaid parity with the US dollar for the archetypal clip successful May 2021, Jump allegedly helped Terraform Labs reestablish the peg.

In June, the US Commodity Futures Trading Commission (CFTC) reportedly started investigating Jump’s activities successful the crypto market. However, the regulator’s probe does not connote immoderate misconduct by the marketplace maker.

The station Jump Trading accused of pump-and-dump strategy successful DIO token lawsuit appeared archetypal connected CryptoSlate.