Jump Trading Faces Market Manipulation Allegations From Former Employee

On January 2, a Twitter account called @trading_axe, with more than 120,000 followers, posted a shocking statement claiming to have been a market maker at Jump, one of the market's largest hedge funds and market makers. Thereby revealing how large investment funds manipulate prices in the crypto market, especially over the weekend.

According to @trading_axe, the sharp price drops over the weekend were not natural fluctuations but the result of a group of whales working together in closed chat groups to coordinate crypto prices on the chart. This person claims that this is a tactic that he himself invented during periods of low liquidity markets.

This tactic includes accumulating positions, following Crypto Twitter to assess market sentiment, and classifying accounts to determine cash flows as well as trends.

One of the favorite tricks @trading_axe mentioned is intentionally “nuking” (pushing the price down sharply) when a new 4H frame candle opens on BTC or ETH. The account shares that this creates a perfect trap, as experienced traders will believe that the market will return to the test area without a candle beard, causing them to be lured into a buy order while the price continues to fall.

As the price falls deeper, bottom-catchers begin to panic and sell off before the market reverses, while bottom-short traders also become overconfident and easily trapped.

While providing no corroborating evidence, @trading_axe claims that most of the “bad” price movements in the market are actually the result of organized whaling groups.

He claimed that the nickname he used in Jump was “Vincent van Gogh,” referring to his ability to draw the most sophisticated price traps. According to the account, the current price movements are similar in style to the tactics he used to do, leading him to believe that someone is copying his way of playing.

After @trading_axe made shocking claims about price manipulation in the crypto market, another account, Jeff Schroeder (@SEJeff), who claims to have worked at Jump from 2012 to 2024, spoke out against it.

Jeff questioned the veracity of the assertions from @trading_axe, arguing that if someone actually ever worked at Jump, they would not be able to publicly share such information without facing serious consequences from internal control. This person stressed that security at Jump was tight and would not let a single employee divulge internal information arbitrarily.

@trading_axe then went on to respond with a series of vague hints about past events, hinting that they once worked with Jeff Schroeder on a project involving Solana validators during the bear market period. Even so, Jeff Schroeder still holds the position that everything @trading_axe mentions is public information, which is not surprising.

However, the veracity of these claims has yet to be verified, and there is no evidence that @trading_axe actually ever worked at Jump.

Revelations from @trading_axe about how market makers manipulated prices over the weekend stirred the crypto community, but looking back on the past, this isn't the first time there's evidence that market makers are willing to manipulate prices in their favor.

One of the best examples is the Terra/Luna crash, where a large market maker like Wintermute, which was tasked with providing liquidity to LUNA, bet on the collapse of the very ecosystem it serves.

The lawsuit between the SEC and Terra/Luna also revealed a shocking detail: Evgeny Gaevoy, CEO of Wintermute, talked internally about “dumping the entire ecosystem” just as the market began to plunge into chaos in 2022.

Although Wintermute took out a 300,000 LUNA loan with an option to be a market maker, when things went down, they did not try to stabilize the market but actively short LUNA to make a profit, even if it helped push the project to the brink of collapse.

Looking back at @trading_axe's claims about whales and market makers manipulating crypto prices, especially over the weekend, Wintermute's case further reinforces the view that market makers not only serve as liquidity providers but can actively manipulate prices, even pushing an entire ecosystem into crisis if it works in their favor.

While projects may believe that market makers help stabilize prices, are they truly loyal to the project or simply pursuing their own interests?