Jane Street and Jump Crypto exiting the U.S. crypto market will further bring new set of troubles for crypto exchanges Binance and Coinbase.
Due to intense regulatory scrutiny, a lack of regulatory clarity, and leading market makers Jane Street and Jump Crypto leaving the United States.
Leading cryptocurrency exchanges Binance, Coinbase, and other entities involved in the industry are facing a variety of issues as a result of the US SEC-led regulatory crackdown on cryptocurrencies, and some are considering moving their operations abroad.
Major Crypto Firms Jane Street and Jump Crypto to Depart US Market
Amidst a ferocious regulatory crackdown on cryptocurrencies in the US, two of the top market-making companies in the world, Jane Street and Jump Crypto, have decided to stop trading cryptocurrencies there. According to Bloomberg on May 10, the companies will keep making market trades and won’t completely leave the cryptocurrency market.
Jump Crypto, a division of Jump Trading that deals in digital assets, is leaving the US market while still intending to grow its business internationally.
Following the FTX fiasco and Terra-LUNA crisis, US federal departments and regulators have stepped up their regulatory crackdown on the cryptocurrency market. In actuality, the FTX and Terra-LUNA crises were connected to Jane Street and Jump Crypto. Jane Street is mentioned by the US CFTC in its lawsuit against cryptocurrency exchange Binance, whereas Jump Crypto supported the TerraUSD algorithmic stablecoin by demonstrating liquidity and funds. Sam Bankman-Fried and FTX are both connected to it. Many of FTX’s executives had previously worked for Jane Street.
Crypto Market Liquidity Concerns Grow as Demand Surges
By supplying liquidity, market makers like Jane Street and Jump Crypto help the cryptocurrency market. One of the main causes of the cryptocurrency contagion we saw last year was problems caused by a lack of liquidity.
Jump and Jane Street reducing their market-making activity will add pressure to a market that has already been losing liquidity throughout the year.