Jump Trading accused of pump-and-dump scheme in DIO token lawsuit

FractureLabs, the developer of the web sport ‘Decimated’, has filed a lawsuit towards Leap Buying and selling. Bloomberg Information accused the corporate of market manipulation on October 16.

The grievance alleges that Leap engaged in a “pump and dump” scheme with the sport’s native token, DIO, which is traded on crypto markets.

Accusations

In keeping with the submitting, FractureLabs deliberate to boost cash by way of an preliminary providing of DIO on HTX – previously Huobi – and employed Leap as a market maker in 2021.

As a part of their settlement, FractureLabs loaned 10 million DIO tokens to Leap’s subsidiary and despatched 6 million tokens to HTX on the market.

After the token’s value rose to $0.98, Leap reportedly liquidated its holdings, inflicting DIO to fall to lower than half a cent. The corporate then purchased again the tokens for a fraction of the value, returned them to FractureLabs and canceled the market making contract.

FractureLabs claims that Leap misrepresented its intentions and violated an settlement to maintain the token’s value inside a sure vary underneath Huobi’s phrases. Consequently, HTX withheld most of a $1.5 million Tether (USDT) deposit made by FractureLabs, which the corporate is now pursuing by way of arbitration.

Whereas HTX declined to remark as a consequence of ongoing litigation, it emphasised its dedication to working inside authorized frameworks.

Controversies from the previous

That is the most recent controversy surrounding Leap Crypto. Within the lawsuit filed towards Terraform Labs by the US Securities and Change Fee (SEC) in February 2023, the regulator acknowledged that it believed Leap was “instrumental” within the demise of the UST stablecoin, USTC.

Though Leap isn’t a defendant within the Terraform Labs case, the regulator acknowledged that when UST first misplaced parity with the US greenback in Could 2021, Leap would have helped Terraform Labs restore the peg.

In June, the US Commodity Futures Buying and selling Fee (CFTC) reportedly started investigating Leap’s actions within the crypto market. Nonetheless, the regulator’s investigation doesn’t indicate misconduct by the market maker.