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A complaint has been launched against Jump Trading by Fracture Labs, a producer of cryptocurrency games, alleging that the company is engaging in a “pump and dump” scheme by manipulating the value of its DIO gaming token. Jump Trading allegedly utilized its market position to artificially raise the token’s price before selling off its holdings for profit, according to the lawsuit, which was filed on October 15 in Illinois District Court.
According to the lawsuit, Fracture Labs entered into an agreement with Jump Trading in 2021 to assist in the initial offering of its DIO token on the Huobi crypto exchange, now known as HTX. As part of the deal, Fracture Labs loaned 10 million DIO tokens to Jump Trading, valued at $500,000. Additionally, 6 million tokens worth $300,000 were transferred to HTX, where the token was promoted through influencers to raise interest.
Following the launch, the DIO token’s value spiked to $0.98, making the loaned tokens worth $9.8 million. Fracture Labs alleges that Jump then liquidated its entire DIO holdings, causing the token’s price to plummet to $0.005. The game developer claims that Jump later repurchased the tokens at this lower price, returning them to Fracture Labs before terminating the agreement.
“The result of Defendant Jump’s fraudulent scheme is that DIO was dramatically devalued, making it harder for Fracture Labs to attract investors and interest,” the lawsuit states. As a consequence, Fracture Labs says the token’s sudden drop in value damaged its credibility and ability to secure future investment.
Furthermore, Fracture Labs claims that it had also deposited 1.5 million USDT into an HTX account as a security measure to prevent market manipulation during the first 180 days of trading. However, HTX allegedly refused to return most of the deposit after the price drop, further adding to the developer’s financial woes.
The lawsuit accuses Jump Trading of fraud, breach of contract, and civil conspiracy. Fracture Labs is seeking damages, disgorgement of profits, and a jury trial. Despite being central to the case, HTX was not named as a defendant in the lawsuit.
Jump Trading and HTX have not yet commented on the matter.