Jump is Back But so is the Terra Shadow

Camila Russo & yyc trader
June 19, 2025

gm, Defiers!

Today’s big story:

Jump Crypto has resurfaced, but faces backlash over Terra scandal

Plus:

Bitcoin hovers around $104,000 after Fed decision
EigenLayer unveils cloud platform, nabs $70M from a16z
Kraken’s L2 Ink plans to launch a token
GENIUS Act faces looming House battle
SSV 2.0 and based applications: Decentralized infrastructure for secure, scalable Ethereum staking [SPONSORED]
How Coinshift is progressing the stablecoin space [SPONSORED]

Read more below! But first, please give our sponsors some love; they make this newsletter possible.

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Here's what that looks like—and why it matters for DAOs, institutions, and investors today.

We’re back! Here’s what you need to know in web3 today

Jumping Back from Scandal

Jump Crypto’s recent “we’re back” announcement feels less like a redemption arc and more like a warning sign of how easy it is in crypto to rack up fines, lawsuits, and multimillion-dollar losses, lay low for a while, and then waltz right back in to the party.

Yesterday, Jump Crypto tweeted its “Reintroducing Jump Crypto” post, inviting “builders, researchers, and policy enthusiasts” to “join us in building the future of crypto together,” without even alluding to its $123 million SEC settlement over TerraUSD, its CFTC investigation, or its near-$300 million FTX losses.

Not everyone was reaching for the champagne. Veteran crypto investor Cobie blasted the move on X, drawing almost as many likes as Jump’s own announcement:

“Jump Crypto is BACK? One of the same teams that spent $20 million propping up UST now wants to build the future? Bold strategy.”

The outrage comes from the list of high-profile controversies and losses that Jump has never publicly owned up to.

The biggest one, as Cobie tweeted, is about Jump’s involvement in Terra’s UST implosion. Plaintiffs allege Jump’s Tai Mo Shan arm covertly spent billions to prop UST’s peg, pocketing over $1.3 billion in profits while investors were kept in the dark. Tai Mo Shan paid $123 million to settle antifraud charges over undisclosed UST buys, without admitting wrongdoing.

In another smaller case involving Jump’s TradFi arm back in 2018, a runaway HFT bot amassed massive short positions before the exchange’s kill-switch kicked in, netting the firm a $250,000 SEC fine for poor risk controls.

The U.S. Commodity Futures Trading Commission is reportedly probing Jump’s derivatives and market-making practices, including fallout from the Wormhole hack and FTX exposure (Jump covered a $325 million hole in blockchain bridge Wormhole after it was hacked, and lost almost $300 million in FTX’s collapse). Bear in mind, though, a CFTC probe doesn’t necessarily imply wrongdoing.

Crypto Forgives and Forgets

This pattern of flaming out in a scandal, laying low, and coming back, is far from unique.

Take Three Arrows Capital’s Su Zhu and Kyle Davies. After 3AC’s $3 billion collapse stemming from the FTX crash, they dropped off the map. They reappeared advising new DeFi ventures by late 2022 and, ironically, founded an exchange to trade FTX bankruptcy claims (which later went bust). They even started peddling the “supercycle” narrative again.

The NFT world is littered with similar tales: “Evil Ape” of Evolved Apes fame drained $2.7 million in ETH in 2021 then reportedly resurfaced under a Singapore shell for a fresh gaming pitch; Frosties’ founders were arrested for a $1.1 million rug-pull in March 2022, yet they had already sketched plans for a follow-on “Embers” sale; “Prometheus” allegedly made off with $33 million from ZKasino in 2024, only to relaunch as WhiteRock_Fi in early 2025; and the anonymous “Bored Bunny” creator vanished with $21 million in 2022, re-emerging weeks later teasing a space-themed spin-off.

It’s Easy to Make a Crypto Comeback

Why does crypto keep handing out second chances? First, pseudonymity and jurisdictional arbitrage let founders slip between identities and legal regimes. Second, on-chain capital moves faster than any regulator’s subpoena; billions can mint and scatter in hours. Third, a hype-driven culture is always thirsty for the next token drop, and bad actors with slick marketing can wash away bad press by dangling a potential 100x pump. Finally, light licensing and fragmented oversight mean there’s often no central blacklist to bar proven scammers.

And the cycle fuels itself. A recent study warns: “Most victims do not learn from previous experiences; unlike victims studied through traditional systems, DeFi victims tend to find new services, without revising their security practices, to recover their losses quickly. The abundance of various DeFi services and opportunities allows victims to continuously explore new financial opportunities, and this reality seems to cloud their security priorities.”

If crypto’s promise is a borderless, permissionless financial future, it badly needs guardrails that bake accountability into the code. We can start by rolling out self-sovereign identity and verifiable credentials so founders can’t slip away behind fresh wallets. On-chain reputation oracles and token-curated sanction lists would let protocols refuse interactions with known bad actors. AI-driven monitoring could flag rug-pull patterns, like instant ownership transfers or owner-withdraw functions, before minting ever opens.

By entwining real-world identity and reputational checks with on-chain mechanics, we can ensure that a shady past doesn’t just become the prelude to the next big con.

With love,

Cami, founder of The Defiant

📈 Markets in the last 24 hrs:

TICKER	VALUE	24H
Bitcoin	$104,329	-0.12 %
Ethereum	$2,499.24	0.00 %
XRP	$2.15	0.50 %
BNB	$640.29	-0.00 %
Solana	$143.96	-0.59 %

This is the news that mattered in the past 24 hrs

Crypto markets remained steady after the U.S. Federal Reserve held rates unchanged on Wednesday. Bitcoin is consolidating around $104,000, while ETH hovers around $2,500.
Ethereum restaking protocol EigenLayer has unveiled EigenCloud, its new developer platform, alongside a $70 million investment in EIGEN tokens from venture capital giant A16z.
Less than seven months after launching its mainnet, Kraken’s Ink Layer 2 network plans to issue a native token.
After the Senate passed its GENIUS stablecoin regulation bill, the House now has the opportunity to vote on the bill, amend it, or focus on its own STABLE Act, on which it has been working for months.

🎬WATCH

In the latest episode of The Defiant Podcast, Cami spoke with Luca Prosperi, CoFounder and CEO of M0, about the cutting-edge infrastructure fueling the next generation of digital currencies. From the decentralization debate to interoperability with other stablecoins, find out how M0 is shaping the future of stable assets and how this evolution impacts the broader crypto ecosystem.

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