Michael Lewis’ new book Going Infinite revealed that Jump Trading is one of the largest losers in the FTX collapse, apparently giving up almost $300 million. Among the Jump-related entities mentioned is Tai Mo Shan Limited, which used to be one of Robinhood’s largest market makers.
In the second quarter of 2021, 29% of its total revenue came from transactions with Tai Mo Shan.
In its role at Robinhood, Tai Mo Shan was one of the market makers responsible for fulfilling user cryptocurrency trades. Robinhood would direct user orders to Jump Trading, which would then supply the required cryptocurrency or money, and Coinbase Custody was responsible for providing custody services to Robinhood.
Tai Mo Shan, as well as Jump, was deeply entangled with FTX, losing hundreds of millions of dollars in the collapse of the exchange.
The relationship between Jump and Robinhood appears to have ended in 2022.
Also in 2022, Jump had to spend hundreds of millions of dollars in order to bail out the Wormhole cryptocurrency bridge, which had been hacked.
Jump currently faces a lawsuit that alleges that it manipulated the Luna and Terra markets. Documents revealed as part of the Securities and Exchange Commission’s (SEC) lawsuit against Terraform Labs detail how Tai Mo Shan received a large loan of Luna from Terraform starting in 2019. As part of the agreement, Jump agreed to “improve liquidity of Terra.”
The SEC complaint seems to reveal that Jump made approximately $1.28 billion from selling the Luna acquired from Terraform Labs. Currently, the SEC lawsuit does not allege wrongdoing by Jump or its subsidiaries.
Reportedly, Jump has reduced its cryptocurrency activities in light of increased regulatory scrutiny.