Game developer FractureLabs has filed a lawsuit against major cryptocurrency market maker Jump Trading, accusing them of market manipulation of the DIO token.

FractureLabs' accusations against Jump Trading

FractureLabs asserts that after hiring Jump to manage the market for the DIO token, it transferred 16 million tokens—10 million to Jump and an additional 6 million to HTX (formerly Huobi). Following a promotional campaign, the token's price surged to $0.98. Jump allegedly sold its tokens at this peak price, causing the token's value to crash to less than half a cent. FractureLabs accuses Jump of causing this market downturn to repurchase the tokens at a discounted rate, thus violating its commitment to market facilitation.

Jump Trading's past controversies

This lawsuit is not the first time Jump Trading has been embroiled in controversy. In 2023, the U.S. Securities and Exchange Commission referenced Jump's involvement in the collapse of Terraform Labs' UST stablecoin, although Jump was not a defendant in that case.

Future actions

FractureLabs accused Jump Trading of fraud and deceit, civil conspiracy to commit fraud, breach of contract, and breach of fiduciary duty. It is seeking a jury trial, damages, and disgorgement of profits. Jump Trading has denied FractureLabs’ allegations, calling them “factually flawed” and promising to contest the claims in court.

The situation between FractureLabs and Jump Trading continues to unfold, with all parties preparing for legal proceedings.