Jump Trading accused of crypto ‘pump and dump’ in game dev’s suit

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As a seasoned researcher with years of experience in the ever-evolving world of cryptocurrencies, I find the lawsuit between Fracture Labs and Jump Trading to be a fascinating development. From my perspective, it appears that Jump Trading may have engaged in questionable trading practices, potentially exploiting the DIO token for their benefit.

In simpler terms, Fracture Labs, a company specializing in creating crypto games, has filed a lawsuit against Jump Trading. The allegation is that Jump Trading manipulated the value of Fracture Labs’ DIO gaming token by employing a “buy high, sell high” (or “pump and dump”) strategy.

On October 15th, Fracture Labs claimed in a court case filed in an Illinois District Court that they had a deal in 2021 with Jump, functioning as a market maker. This agreement was to help facilitate the initial offering of Fracture Labs’ DIO token on the crypto exchange Huobi (now known as HTX), where Jump would provide assistance.

In adherence with our contractual obligations, I, as a researcher studying game development, affirm that my team allegedly lent 10 million DIO to Jump, equivalent to approximately $500,000 in current value. Separately, we transferred 6 million tokens valued at around $300,000 to HTX.

After the launch of the DIO token, HTX enlisted the help of online influencers to publicize it. This promotional effort led to a surge in its price, peaking at $0.98. At this point, the value of the borrowed tokens stood at a staggering $9.8 million, as stated in the complaint.

As a crypto investor, I found myself in a position where I had to sell off my entire investment portfolio due to the rapid “mass liquidation” that ensued. This action caused the price to plummet down to an astonishing $0.005, which undoubtedly benefited the trading firm immensely, pocketing them millions, according to Fracture Labs’ claims.

The company claimed it had initially sold, then repurchased the tokens at a reduced cost – approximately $53,000 – and handed them back to Fracture Labs before terminating the contract.

As a researcher, I’ve uncovered compelling evidence suggesting that the deceptive practices employed by Defendant Jump have significantly diminished the value of DIO. This unfortunate consequence has made it more challenging for FractureLabs to entice investors and generate interest.

In simpler terms, Fracture Labs stated that under another portion of their agreement, they transferred 1.5 million Tether (USDT) into an HTX custody account to ensure that the game developer would not tamper with the DIO token market during the initial 180 days of trading.

According to reports, Jump agreed to maintain DIO’s price within specific limits set by HTX during their contract for listing the token on their platform.

Instead, because of the price fluctuations, Fracture Labs alleges that HTX did not return most of the 1.5 million USDT deposited by FractureLabs.

According to FractureLabs, the sudden release of DIO tokens by Jump led to a significant price fluctuation that surpassed the price ranges Jump had suggested and which were also agreed upon by FractureLabs in their listing contract with HTX.

In their claim, Fracture Labs alleges that Jump Trading has acted fraudulently, dishonestly, and in violation of contractual agreements and fiduciary duties. They are seeking a trial by jury, compensation for any losses they’ve suffered, and the return of any ill-gotten gains made by Jump Trading.

HTX wasn’t named as a defendant in the lawsuit. Jump Trading and HTX did not immediately respond to a request for comment. 

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2024-10-17 06:45