Top Market Makers Jane Street and Jump Crypto Pare Down US Crypto Operations Amid Regulatory Pressure
Two prominent market-making firms Jane Street Group and Jump Crypto are cutting back their digital asset trading activities in the US due to heightened regulatory pressure.
Jane Street is also scaling back its global crypto ambitions due to regulatory uncertainty, which makes it difficult for the company to operate in a way that meets regulatory standards in the US, Bloomberg reported Wednesday, citing people familiar with the matter.
While both firms are still actively making markets in cryptocurrencies, they are doing so on a smaller scale than before. The duo does not plan to abandon crypto completely.
Scrutiny of the digital asset industry has increased in recent months following the collapse of high-profile firms and projects, including FTX, the crypto exchange founded by Sam Bankman-Fried, and TerraUSD stablecoin.
This has led regulators to take a closer look at trading platforms, stablecoin issuers, and brokers.
Just recently, Coinbase, the largest US crypto exchange, received a warning earlier this year from the Securities and Exchange Commission (SEC) about potential enforcement action.
Both Jane Street and Jump Trading have faced regulatory scrutiny in the US following the recent crypto meltdown that saw a number of high-profile crypto companies collapse.
Specifically, Jump Crypto, which was a significant backer of Terra since 2019, was questioned by US prosecutors in a probe of the failed TerraUSD stablecoin project.
Jane Street was also among the three US quant-trading firms cited by the Commodity Futures Trading Commission in its lawsuit against Binance as an example of how US-headquartered clients were able to access the platform despite Binance’s promises to exclude them.
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