Leap Crypto was one of the vital energetic merchants on Sam Bankman-Fried’s FTX and Do Kwon’s Terra/Luna/Anchor platforms. Nonetheless, after shedding at the least $300 million after the collapse of FTX and untold civil ramifications for its position in Terra LUNA’s demise, Leap’s crypto heyday has handed.
It has liquidated numerous DeFi positions on platforms like Lido and is sending tens of hundreds of thousands of {dollars} in proceeds to centralized exchanges.
Leap is dealing with at the least two class motion lawsuits and a Commodity Futures Trading Fee (CFTC) investigation. Blockchain proof from the weekend signifies that it is likely to be making an attempt to boost money.
In keeping with work sponsored by Bitget, researchers declare to have deanonymized wallets belonging to Leap which have redeemed over half a billion {dollars} price of Lido’s wrapped staked ether (wstETH) and despatched tens of hundreds of thousands of {dollars} to centralized exchanges.
Different rumors are circulating that Leap is shuttering its market-making enterprise altogether. These are seconded by RealVision’s Raoul Pal.
Is Leap nonetheless a crypto market-maker?
Arkham additionally claims to have deanonymized wallets belonging to Leap. Its research claims that Leap’s crypto balances peaked at $9.6 billion in November 2021 and at the moment are price simply $560 million. Worse, alpha publicity to crypto is even additional restricted to only 6% of this portfolio, with 94% in stablecoins USDC and USDT.
One other pockets that Leap Crypto would possibly management has an extra $130 million price of ether and ether derivatives.
Leap’s comedown is much more suspicious provided that Kanav Kariya stepped down as president on June 24 and has not posted to X since.
After all, as a classy market participant and over-the-counter (OTC) vendor with entry to listed and unlisted unique derivatives, it’s inconceivable to find out Leap’s full portfolio utilizing easy blockchain forensics as this can not account for paper contracts or centralized change positions.
Learn extra: Leap Crypto’s shady backers may make issues worse throughout CFTC probe
Leap’s authorized woes proceed
Within the courts, Leap has a number of unresolved lawsuits. On June 6, Leap Trading LLC confronted a setback within the US District Court docket for the Northern District of Illinois. A category motion lawsuit led by Taewoo Kim gained its request to disclaim a venue switch and lawsuit consolidation request by the previous president of Leap Trading’s crypto arm, Kanav Kariya.
That Illinois class motion will proceed and is distinct from an extra class motion lawsuit in California led by Nick Patterson. Each lessons assert Racketeer Influenced and Corrupt Organizations Act (RICO) claims in opposition to Leap Crypto for counts of aiding and abetting, conspiracy, and unjust enrichment.
Final month, Fortune interviewed quite a few sources and concluded that Kariya was, at the least partly, a frontman. An nameless whistleblower additionally claimed that behind the scenes, leap co-founder Invoice DiSomma “was still pulling most of the strings at Jump Crypto.”
Fortune reported that court docket observers are watching dockets for indicators of potential regulatory actions in opposition to Leap Trading or its crypto arm. The US Division of Justice talked about Leap Crypto’s position within the 2021 Terra (UST) stablecoin de-peg.
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