Trading Powerhouse’s $320 Million Save Suggests It’s Crypto-Rich

(Bloomberg) -- This week's $320 million blockchain hack gives a tantalizing hint at just how huge a presence Jump Trading Group has become in cryptocurrencies.

Jump was always notoriously tight-lipped about its operations even as it grew over the course of two decades into a quiet giant of financial markets. So people took notice when the Chicago-based trading firm started opening up last year about its crypto ambitions. But some secrets remained. Like, for instance, just how much money is the company making in crypto?

Its quick decision to fully refund all the losses from Wednesday's hack suggests quite a lot.

The firm's Jump Crypto division is a leading force behind the development of Wormhole, which acts as a bridge between crypto ecosystems like Ethereum and Solana. On Feb. 2, someone took advantage of a software bug in Wormhole to steal 120,000 Ether worth hundreds of millions of dollars. Jump took action almost immediately, fully refunding the losses.

A spokeswoman for Jump declined to comment.

Robinhood Deal

So where does this crypto fortune come from? One way is via Robinhood Markets Inc., the popular brokerage app. Jump pays Robinhood, and in return Robinhood sends its clients' crypto trades to Jump, which executes them.

During the first nine months of last year, those payments to Robinhood equaled 17% of the broker's total revenue, according to a Securities and Exchange Commission filing. That amounts to about $247 million paid by Jump for the right to get orders from Robinhood. Jump's profits presumably exceed that.

Jump views its role in crypto as more than just a trader: It wants to help build the emerging industry's basic infrastructure. That's what brought it to Wormhole. Last August, it bought Certus One, which helped develop Wormhole.

Jump contributes to other crypto projects, too, like Pyth, which gives regular people access to the turbocharged data feeds used by some of the world's most sophisticated traders.

Despite having to cough up money to cover a loss that would've killed other trading firms, Jump didn't seem to break a sweat. Kanav Kariya, who became the head of Jump Crypto last year at the age of 25, spent the hours after the incident answering tweets about it.

Praying Hands

He responded with the praying-hands emoji to a tweet Wednesday that said: “Don't bet against a team willing to put up $300m of their own money to make users whole.”

“Yesterday I learned that crypto doesn't know who Jump Trading is,” Twitter user @IamNomad posted Thursday. “Jump is in the top 5 of biggest, most well-capitalized trading firms in the world. They have easily 40 people dedicated to crypto.”

Kariya responded: “We're closer to 140 on crypto now :)”