A new lawsuit filed by video game developer FractureLabs centers on high-frequency trading giant Jump Trading. The lawsuit accuses the firm of “fraud and deceit” regarding the sales of DIO tokens. This lawsuit is one of the high-profile legal battles in the industry over the past few weeks.
The Alleged Jump Trading Fraud
According to a Bloomberg report, FractureLabs believes Jump Trading manipulated the price of DIO on the Huobi Exchange. As described, FractureLabs claimed it contracted the embattled trading firm to serve as its market maker for the DIO ICO in 2021.
As part of the Initial Coin Offering agreement, it loaned Jump a total of 10 million DIO tokens. The video game studio then sent 6 million DIO as liquidity to Huobi, not HTX. Per the complaint, both Huobi and Jump hired online influencers to promte the token. Based on this promotion, the price of the asset soared to $0.98.
Seeing this hike in price, the lawsuit alleges that Jump sold off its stash, earning about $9.8 million. The price of the asset crashed eventually, lowering it down to less than half a cent. At this point, Jump Trading repurchased the 10 million DIO for $35,000, returned it to FractureLabs and terminated its market making agreement.
While FractureLabs did not name HTX as part of the lawsuit. However, it said the exchange refused to return the $1.5 million worth of USDT deposited as liquidity.
This lawsuit validates some of the market manipulation accusations that many has levied against Jump Trading in the past. Beside its Ethereum and altcoin dumpoffs, the the firm has maintained a low profile in the market since its exposure in the FTX collapse.
Crypto Lawsuits Growing
One common lawsuit in the digital currency ecosystem is between regulators and industry players. The FractureLabs and Jump Trading suit is a major deviation to this order.
Earlier this month, Crypto com filed a lawsuit against the US SEC. The trading platform said the markets regulator overstepped its bounds when it claims the majority of assets are investment contracts.
Bitnomial also sued the SEC afterward as it claimed the US SEC incorrectly tagged its proposed XRP Futures product an investment contract. Many in the industry believe these lawsuits are a protest for clearer regulations from the markets regulator.
Godfrey Benjamin
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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