Jump Trading unstaked and moved over 17,049 Ether from Lido on August 14, sparking massive sell-off rumors. Blockchain analyst firm Lookonchain confirmed that Jump Trading began ETH withdrawals at 7.00 AM UTC.
The company has also redeemed its remaining 21,394 WSTETH and 3,124 RETH into STETH. According to Arkham Intelligence, Jump Trading now holds over 28,000 STETH and over 24,000 ETH.
Jump Trading has transferred the withdrawn assets to centralized exchanges, including Binance, Coinbase, and OKX. Historically, such transfers to hot wallets always precede major company sell-offs.
While the crypto market remains uncertain, ETH has been performing positively over the past week, gaining over 10%. However, the coin has adopted a downward trend in the past few hours, recording around a 2.03% drop in the past hour drop at the time of writing.
Jump Trading’s transfers raise manipulation concerns
Transferred back to their account! pic.twitter.com/BRWhYMwT9W
— Dalio (@Dalio777) August 14, 2024
Crypto market observers speculate why Jump Trading has been making massive transfers since July. A crypto enthusiast on X tweeted that Jump Trading transferred STETH back to its wallet, sharing a screenshot from Arkham Intelligence to support their claims. Another X user speculated on X that the firm was manipulating the market to accumulate more Ether.
A Bloomberg report also mentioned that traders scrutinize the firm’s wallet for answers. Bloomberg cited Arkham Intelligence data, which indicated that assets held in wallets allegedly associated with Jump Trading dropped by over $240 million between August 4 and 8.
Jump Trading has been accused of market manipulation before. The company and Terraform Labs faced a $1.3 billion class-action lawsuit for manipulating the UST stablecoin. The lawsuit claimed that the two companies conspired to boost the stablecoin’s price after its collapse during the FTX fiasco.
On June 24, Jump Trading’s CEO stepped down following CFTC’s ongoing investigation into the company. Many in the crypto community speculated that the investigation concerned its crypto activity. The crypto community also speculated that the company’s massive sell-off was a move to shut down its crypto activity after CFTC’s probe began.
Jump Trading sell-off triggers a market crash
Jump Trading started massive ETH sell-offs on August 5, leading to significantly high market volatility. A report from Singapore-based QCP Group highlighted that the sell-off caused the ‘Black Monday.’ QCP mentioned Paradigm VC as another company that also initiated massive sell-offs.
ETH dropped by over 20% within 24 hours, with other altcoins and BTC following suit. BTC’s price reached lows of $49,121, while ETH’s price tumbled to $2,122. Crypto-related stocks also suffered major plunges, including Coinbase’s COIN and Robinhood’s HOOD.
Many traders also panic-sold their assets, leading to significant liquidations. The markets experienced over $1.2 billion in liquidations, with nearly 300,000 traders making losses as a result. The cryptocurrency exchange Huobi handled the largest liquidation order, worth $27 million.
Some companies still found a positive from the market crash. ARK Invest is one of the investment firms that accumulated crypto-related stocks during ‘Black Monday.
