The Commodity Futures Buying and selling Fee (CFTC) has launched an investigation into Chicago-based buying and selling agency Leap’s involvement within the cryptocurrency market, specializing in its buying and selling and funding actions, in line with an undisclosed particular person acquainted with the matter. report Reported by Fortune Journal.
Hacks and crashes plague Leap Buying and selling
The survey comes after a turbulent interval for Leap, which has been acknowledged for its experience in algorithmic buying and selling. Nevertheless, the corporate has confronted setbacks, together with being linked to a sequence of hacks and closures.
The corporate suffered a significant blow when Wormhole, a decentralized finance (DeFi) platform designed to bridge completely different blockchains, was hacked value $325 million.
Moreover, following the collapse of FTX in November 2022, it was revealed that Leap, the highest market maker for the failed cryptocurrency alternate, suffered losses of practically $300 million.
Additional controversy arose when the U.S. Securities and Change Fee (SEC) filed a lawsuit in opposition to Terraform Labs and its founder Do Kwon in February 2023 associated to the failed TerraUSD stablecoin.
The SEC case led to April with a jury ruling in favor of the company, primarily based on testimony from a former Leap worker who acted as a whistleblower.
Cryptocurrency crackdown expands
In March 2023, the U.S. Division of Justice filed a felony criticism in opposition to Do Kwon, saying Leap was a “U.S.-based proprietary buying and selling agency” that performed a job in sustaining Terra’s peg. Nevertheless, just like the SEC lawsuit, there aren’t any wrongdoings or allegations in opposition to Leap.
Leap subsequently scaled again its involvement within the cryptocurrency area, spinning off two high-profile initiatives and opting out of competing within the Bitcoin ETF market.
The CFTC’s investigation into Leap’s cryptocurrency operations is the most recent investigation by a U.S. federal company. Whereas it’s unclear whether or not the company is contemplating bringing expenses in opposition to the corporate, it’s value noting that a lot of Leap’s actions, together with crypto merchandise, fall beneath the CFTC’s jurisdiction.
As a Bitcoinist reportCFTC Chairman Rostin Behnam mentioned cryptocurrency corporations can count on a brand new spherical of enforcement actions.
Featured pictures from DALL-E, charts from TradingView.com
