Robinhood, Jump Trading Are No Longer Working on Crypto-related Initiatives: Report

Robinhood (NASDAQ:HOOD),  Jump Trading are no longer working cooperatively on crypto-related initiatives.

Robinhood’s entry into the nascent crypto and blockchain sector a few years back had been supported by Jump Trading, a large firm focused on traditional financial services/markets.

Robinhood Markets, the retail broker whose foray into the crypto sector a number of years ago had been back by Chicago’s behemoth Jump Trading. However, this is no longer the case, because Jump Trading is no longer working with Robinhood. This, according to sources familiar with the issue.

As first reported by Bloomberg and various other media outlets, Robinhood’s zero-fee crypto business model significantly relies on market-making companies in order to maintains its billions of dollars in volume trading seamlessly.

However, Jump now seems to be backing away from US markets, presumably due to increased regulatory pressure. It’s worth noting that on-chain data indicates that Jump and Robinhood parted ways late last month. At present, Robinhood has not provided too many details regarding this new development. Meanwhile, Jump Trading has also not commented on the matter as of yet.

According to sources sharing details on this issue, there is not much public information regarding the firms’ business relations. And Robinhood’s latest financial reports have not referenced Tai Mo Shan Ltd. – which is the Jump subsidiary/affiliate that took care of Robinhood’s order flow – since at least Q4 2022.

As noted by the sources, the publicly-traded broker is currently working with different market-making companies such as B2C2, which now takes care of the biggest share of Robinhood’s cryptocurrency flow. This, according to public filings shared with the US Securities and Exchange Commission (SEC).

Currently, it is not clear exactly why Robinhood and Jump have decided to not work cooperatively together.

However, Jump has for a few years been among the biggest market makers in traditional finance, with a major position on the Chicago Mercantile Exchange and various other markets that are managed by the CME Group.

The American government’s massive cryptocurrency crackdown has made it quite challenging for traditional finance institutions to stay as active in crypto as they had been previously.

Jump Trading is among the first few companies that had enabled Robinhood’s crypto-focused business strategy and handled market making for its service as the business went into the historic 2021 bull markets.

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