FractureLabs Targets Jump Trading in a 'Fraud and Deceit' Lawsuit Centering on DIO Token Sales

A new lawsuit filed by video game developer FractureLabs centers on high-frequency trading giant Jump Trading. The lawsuit accuses the firm of “fraud and deceit” regarding the sales of DIO tokens.

Video game developer FractureLabs has filed a new lawsuit against high-frequency trading giant Jump Trading. The suit, filed in the Northern District of California, accuses Jump Trading of “fraud and deceit” in connection with the sale of DIO tokens.

The lawsuit is one of several high-profile legal battles in the digital currency industry that have unfolded in recent weeks.

FractureLabs alleges that Jump Trading manipulated the price of DIO on the Huobi Exchange. According to Bloomberg, FractureLabs contracted Jump Trading to serve as its market maker for the DIO Initial Coin Offering (ICO) in 2021. As part of the agreement, FractureLabs loaned Jump a total of 10 million DIO tokens.

The video game studio then sent 6 million DIO to Huobi as liquidity, but the complaint states that the tokens were sent to the HTX exchange instead. Both Huobi and Jump then hired online influencers to promote the token, which drove the price of the asset up to $0.98.

At this point, Jump allegedly sold off its stash of DIO tokens, earning about $9.8 million. The price of the asset crashed eventually, dropping it down to less than half a cent. At this point, Jump Trading repurchased the 10 million DIO for $35,000, returned it to FractureLabs and terminated its market making agreement.

While FractureLabs did not name HTX as a defendant in the lawsuit, it said the exchange has refused to return the $1.5 million in USDT that was deposited as liquidity.

This lawsuit adds fuel to some of the market manipulation accusations that many in the crypto community have levied against Jump Trading in the past. Aside from its alleged Ethereum and altcoin dumpoffs, the firm has maintained a low profile in the market following its exposure in the FTX collapse.

Crypto Lawsuits Piling Up

Most of the lawsuits filed in the digital currency ecosystem this year have involved regulators and industry players. The FractureLabs and Jump Trading suit is a major deviation to this order.

Earlier this month, Crypto com filed a lawsuit against the US Securities and Exchange Commission (SEC). The trading platform said the markets regulator overstepped its bounds when it claims the majority of assets are investment contracts.

Bitnomial also sued the SEC afterward as it claimed the US regulator incorrectly tagged its proposed XRP Futures product an investment contract. Many in the industry believe these lawsuits are a protest for clearer regulations from the markets regulator.

The above is the detailed content of FractureLabs Targets Jump Trading in a 'Fraud and Deceit' Lawsuit Centering on DIO Token Sales. For more information, please follow other related articles on the PHP Chinese website!