Game developer FractureLabs sues Jump Trading for making millions of dollars by manipulating its token price

Video game developer FractureLabs has filed a lawsuit against cryptocurrency market maker Jump Trading, alleging it engaged in “fraud and deception” by manipulating the price of tokens used in online games. According to the lawsuit, FractureLabs planned to raise funds in 2021 through an initial offering of DIO tokens on Huobi HTX. The company said it retained Jump as a market maker for DIO, a token used in its online game Decimated that also trades on crypto markets. As part of the agreement, it loaned 10 million tokens to a Jump subsidiary while separately sending 6 million DIO tokens to HTX to sell in the offering. “Jump systematically liquidated DIO holdings, generating millions of dollars in revenue for itself,” the indictment states, as the sales caused the price of DIO to drop to about 0.5 cents. Jump subsequently repurchased the heavily discounted tokens, then worth about $53,000, and returned them to FractureLabs before canceling its agreement to serve as a market maker for the tokens. (Bloomberg)