(Bloomberg) -- Jump Trading Group has parted ways with Wormhole, the crypto project it injected about $320 million into almost two years ago following a massive hack, as the market maker retrenches in the digital-assets space.
Senior Wormhole staffers including its chief executive officer, Saeed Badreg, and Chief Operating Officer Anthony Ramirez left in recent weeks to run Wormhole as an independent entity, said people with knowledge of the matter, who asked not to be named discussing private information. It wasn’t clear how many people in total departed Jump as part of the move.
Wormhole was part of Jump Crypto, the digital-asset unit of Jump Trading that’s been shrinking this year as the parent firm reduced its exposure to volatile cryptocurrency markets. Following the split, Jump Crypto’s workforce has now dropped by roughly half since peaking at around 150 in 2022, the people said.
Jump Trading declined to comment. Badreg and Ramirez didn’t respond to requests for comment. The protocol encompasses Wormhole Labs and the Wormhole Foundation.
Jump’s partial retreat from crypto comes as trading volumes have remained depressed this year even as prices rallied, with Bitcoin more than doubling. Rival Jane Street Group, where Sam Bankman-Fried worked before starting his now-bankrupt crypto exchange FTX, stopped all token movements from its known crypto wallets in late June, based on data on blockchain intelligence platform Arkham. Jane Street didn’t respond to a request for comment.
Even so, market activity is showing signs of recovery amid speculation that US regulators could soon give their first blessing for exchange-traded funds that invest directly in Bitcoin. Jump is monitoring the SEC’s decision and could ramp up its crypto business again should it approve an ETF, one of the people said.
CoinDesk reported last month that Jump is among firms that have held talks with BlackRock Inc. about a market-making role for its proposed Bitcoin ETF, which is awaiting SEC approval.
Read more: Jane Street, Jump Pull Back Crypto Trading Amid US Crackdown
Jump bought a crypto firm called Certus One in 2021, bringing on board the team that developed Wormhole. The project was a so-called crypto “bridge” — software that links different blockchains like Solana and Ethereum together to make transactions easier. Jump was a major backer of Solana.
Then, in early February last year, disaster struck. Hackers stole cryptocurrencies worth roughly $320 million from Wormhole by exploiting security vulnerabilities in its software. It was one of several large attacks on crypto bridges in early 2022, some of which have been linked to North Korean outfit Lazarus Group.
Read more: Inside Jump Trading’s Response to a $325 Million Wormhole Heist
Within a day, Jump replenished the funds that were drained from Wormhole. Jump Crypto President Kanav Kariya at the time told the Up Only podcast that Wormhole was one of the unit’s “ultra high conviction projects” and that it had “some of the best engineers in the space.”
Blockworks Research said in February that Jump Crypto appeared to have recovered the the stolen cryptocurrencies.
Earlier this year, nine Jump Crypto employees working on the Pyth Network, which operated a financial-data feed based on blockchain technology, left to establish the project as a separate entity — similar to what’s happening with Wormhole.
Like many other companies in the cryptoasset space, Jump has also been swept up in the legal fallout from the wave of scandals that swept the industry last year.
In a February lawsuit against crypto project Terraform Labs, the SEC alleged that Terraform secretly entered into an arrangement with Jump to prop up algorithmic stablecoin TerraUSD a year before it collapsed, court filings show. The agreement yielded a profit of about $1.3 billion for Jump, according to the filings. Jump hasn’t been accused of wrongdoing.
The stablecoin was the brainchild of South Korean entrepreneur and Terraform Labs co-founder Do Kwon, who has spent time in a Montenegrin prison this year and is wanted by both his native country and the US on fraud charges. TerraUSD’s flameout cost investors at least $40 billion.
In a separate class-action lawsuit against Jump from investors in TerraUSD and the sister Luna token, the company’s lawyer said its trading in TerraUSD didn’t constitute manipulation of the stablecoin.
--With assistance from Anna Irrera.
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