The Chicago-based financial firm Jump Trading had made its name in the shadowy world of high-frequency trading during the early 2000s “Flash Boys” era, but lately, it had dipped its toes—and then its feet, legs, and torso—into the volatile cryptocurrency sector. 

The firm had become a kind of silent partner for one of the most high-profile projects in crypto, an algorithmic stablecoin called TerraUSD that was meant to maintain a $1 peg through a complex mechanism tied to a related cryptocurrency called Luna—a careful dance that Jump helped coordinate on the backend by fulfilling trades. But despite the bluster of Terra’s swaggering founder, Do Kwon, the stablecoin was failing. It had lost its peg. 

Jump stood to make millions on its deal with Terraform Labs, the TerraUSD developer—or the whole thing could quickly collapse. Jump’s cofounder, Bill DiSomma, was not ready to abandon his prize pig. So he hopped onto the crypto team’s always-on Zoom meeting, looking for a solution. 

After a few minutes, one emerged: Kanav Kariya, a 25-year-old recent intern who was rising through the ranks of the digital assets division, joined the call, according to an employee’s later court testimony. 

“I spoke to Do,” Kariya announced. “They’re going to vest us.” 

What happened next would, quite literally, change the course of the crypto industry. Over the next week, Jump secretly bought up huge tranches of TerraUSD to create the appearance of demand and restore the coin’s value to $1, according to court documents. Meanwhile, Kwon “vested” Jump, meaning he agreed to deliver 65 million tokens of Luna to Jump at just $0.40, even though the coin would trade, at times, at more than $90 on exchanges. 

Jump ultimately made $1 billion from that agreement alone, the Securities and Exchange Commission (SEC) would later state, and a few months later, Kariya was named president of Jump Crypto. 

The operation had allowed Terra to maintain its facade of stability: As Jump was restoring the peg behind the scenes, Kwon was boasting on Twitter that the stablecoin had naturally recovered. Privately, according to court records, one Terra employee acknowledged in a text message that “if Jump hadn’t stepped in, we actually might’ve been fucked. Lol.”

These dubious heroics succeeded only in staving off the inevitable: When TerraUSD lost its peg again a year later, there was nothing Jump could do. By May 2022, the cryptocurrency had grown in popularity, and its failure was catastrophic. Some $40 billion in investors’ money evaporated into thin air in a matter of days. People across the globe lost life savings that they had plowed into the ostensibly rock-solid cryptocurrency. Crypto communities on Twitter and Discord were filled with investors pleading for restitution. Some threatened suicide. And the collapse kicked off a chain reaction across crypto, one that would in November 2022 topple Sam Bankman-Fried’s once seemingly infallible exchange, FTX, and fuel a global outcry over the excesses and lack of controls in the crypto world. 

But Jump’s role in propping up the flawed stablecoin behind the scenes remained a secret—at least until the SEC filed a massive fraud lawsuit against Terraform Labs and Kwon in 2023, built partly on the testimony of a whistleblower from Kariya’s team. Terraform Labs and Kwon reached a $4.5 billion settlement with the SEC in June, but much of that will likely not be paid because Terraform filed for bankruptcy earlier this year. Kwon still faces criminal charges with the Department of Justice (DOJ) pending extradition from Montenegro, where he was detained. He has denied wrongdoing, and Terraform did not respond to a request for comment.

Though Jump was not charged with any crimes, the eminent firm’s dealings with Kwon were seen as, at the very least, unscrupulous. Its name was dragged through the mud, its trade secrets outed in the most ignoble of settings. The Jump whistleblower’s testimony in a New York federal courthouse in March 2024 marked an almost unthinkable nadir for Jump’s foray into the volatile world of crypto. 

Kariya declined to comment, and a Jump spokesperson declined to make any executives available or comment on the record for this story. Fortune spoke with more than two dozen former employees, competitors, and traders in the industry, and found that many would only speak on condition of anonymity, for fear of retaliation. Even if Jump’s activity in crypto has waned, it remains one of the most powerful players in the space, commanding hundreds of millions of dollars.

On its face, the Jump saga echoes many of the familiar tropes woven into the blockchain industry. But Jump was something different—an established titan of traditional finance (“TradFi” in crypto parlance) that thought it could command the nascent space, stepping in as the adult in the room, then walk away with billions. Instead, the trading firm learned the same painful lesson as everyone else who thought they could outsmart the gravity of market systems. As one former Jump employee tells Fortune, “The history of finance was written in the blood of investors.”

The whiz kid recruited from college

Since its founding in 2001, Jump Trading has become a respected fixture of Chicago’s storied financial scene. But the 18-year-old Kariya had no reason to have ever heard of the enigmatic firm when he arrived at the campus of the University of Illinois in 2014. 

A middle-class kid who grew up in a two-family house in Mumbai, India, he had picked the University of Illinois from a list of the top undergraduate engineering schools in U.S. News & World Report. The chill of his first winter in Champaign didn’t deter him. He majored in computer science, though Kariya had spent his childhood playing video games and watching war films—unlike many of his future coworkers, who had spent their childhoods learning to program. He later explained on a podcast that he had known he wanted to come to the U.S. after touring a couple of universities during a trip to Disneyland when he was 13. “The infrastructure and the quality of education seemed very appealing,” he said. “The college campuses all had computers.” 

Within just a few years of arriving, Kariya had landed a prestigious internship at Jump Trading, where he rose quickly in the heyday of crypto. Today, Kariya’s name is as well-known in crypto circles as Jump’s. That’s partly because Jump’s other executives have made a point of staying out of the spotlight while thrusting Kariya into it. 

At the ripe age of 25, as president of a newly launched Jump Crypto division in 2021, Kariya’s distinctive visage, with his mop of black hair and drooping handlebar mustache that makes him look like a cowboy coder, was ubiquitous—all over lists of tech up-and-comers and the panel lineups for crypto conferences. And as crypto markets came tumbling down in 2022, Kariya became the baby-faced symbol of the missteps of his firm, and others like it. 

At the University of Illinois, Jump didn’t show up to career fairs or post on listings boards. Its presence there, recruiting graduates and students like Kariya, was more of a whispered secret. The firm’s two founders, Bill DiSomma and Paul Gurinas, had attended the University of Illinois before striking out for the pits of the Chicago Mercantile Exchange. On that exchange, where traders jump and shout to compete for prices (a practice, according to company lore, that inspired their firm’s future name) DiSomma and Gurinas watched the electronic trading revolution consume the world around them. They became determined to get their own slice of the action. They founded their own firm, Akamai, in 1999, then changed its name to Jump in 2001. 

As the author Michael Lewis would chronicle in Flash Boys, his 2014 book on the rise of high-frequency trading, companies like Jump—alongside its competitors, from Jane Street to Citadel—became defined by their secrecy. Their edge was technology: having minuscule advantages over their rivals in how fast they could complete trades or spot inefficiencies in any type of market. And they guarded these strategies with feverish devotion. 

John Lothian, a veteran of the Chicago finance scene, recalls signing an NDA just to get through the front doors of Jump’s headquarters in the Montgomery Ward building, an old factory on the banks of the Chicago River—even though he was only there to request sponsorship of a badge for a local Boy Scouts troop. (Jump politely declined to participate.) “They just don’t let people in their office,” Lothian tells Fortune. “It didn’t match their protocol.”

The new kings of crypto

Jump’s foray into crypto was shaped by this culture of secrecy: The firm began dabbling in the sector as a kind of testing ground for its interns that kept them siloed from its main business, according to former employees and other people familiar with the firm’s operations. 

In late 2015, Jump had created a research and development office at its founders’ alma mater, sponsoring research projects and working with professors on futuristic projects, like using virtual reality headsets to mimic trading environments. They would also hire university students as interns, finding potential stars by word of mouth. A friend referred Kariya, who started as a student at Jump’s college satellite. 

Jump had a conundrum. The firm needed to test the mettle of its would-be staffers—whether they could parse the nuances in financial markets and translate them into algorithmic trading models. But it couldn’t give the temporary hires the keys to the kingdom, with its proprietary strategies and billions of dollars in capital. 

Crypto offered a solution. The sector had its own tradable assets, exchanges, and quirks, but it was separated enough from Jump’s world of stocks and bonds that it wouldn’t pose a threat. “It was a bit of a toy market,” says one former employee, who spoke with Fortune on the condition of anonymity to discuss their previous firm. 

The crypto kids weren’t left entirely out in the cold. Indeed, DiSomma was intrigued by crypto’s promise to create decentralized markets. The nascent sector’s enthusiasts believe that blockchain technology could eliminate middlemen like brokers and clearing houses altogether. DiSomma, a trailblazer in the revolution of electronic trading, which had already advanced markets from shouting bids in crowded pits of the Chicago Mercantile Exchange to computers sending information at unfathomable speeds, welcomed the potential for another major paradigm shift. 

It was a bit of a toy market.

A former employee of Jump Trading.

So when Kariya joined as an intern in January 2017, he was assigned to build early crypto trading infrastructure for the firm—with little oversight. “We could just go out and do our own thing,” he would tell a podcast in January 2023. “Work under this fully encapsulated bubble.”

That bubble kept growing. The year of Kariya’s internship, Bitcoin had its first mainstream breakthrough, growing from under $1,000 at the beginning of 2017 to close to $20,000 in December. Jump’s crypto team rose in the ranks at the firm to become one of its best-performing desks at the peak, according to one former employee. 

It was becoming clear that crypto was more than just a toy for interns to play with. And soon after the Bitcoin bubble finally burst in 2018, Kariya graduated and joined the Jump team full-time. His ascent had begun. 

Crypto’s market making giant

High-frequency firms like Jump are shrouded in a veil of mystique, but their main form of trading is called “market making.” When people go to exchanges, they need counterparties to either buy from or sell to. These market-maker firms function as middlemen—the main vehicle for buying and selling, often competing to offer the best price. For the market maker, the spread on each trade may be tiny—cents per share—but at the massive scale that algorithmic systems allow, it can be an eye-poppingly lucrative business.

In traditional finance, market making is a strictly controlled practice with firewalls of regulation ensuring there is no conflict of interest. Rather than partnering directly with companies that issue equities, market makers work with exchanges under the oversight of regulatory agencies. Companies that perform different functions, such as market making and venture investing, will often separate the entities to avoid any possibilities of insider trading or market manipulation.   

Crypto was a different matter. As a new wildcat industry, it was not restricted by those pesky protections built up over decades. “In crypto, you don’t have that direct supervision,” says Michael Selig, an attorney at the law firm Willkie Farr & Gallagher focused on digital assets. Rather than working solely with exchanges, like in TradFi, crypto market makers sign deals with token projects, often helping them get listed on exchanges and then drive buying and selling by creating liquidity, which attracts traders looking for the next hot coin—and a flood of cash. 

To do so, token projects will lend market makers a large supply of tokens so they can kickstart trading. Some firms also negotiate a call option, which gives the market makers the right to buy a chunk of the tokens for a steep discount if the project goes well. Selig says that the inverted structure in crypto—where market makers work with token projects, rather than exchanges—makes some sense, given projects’ need to spur trading activity. It also creates dynamics that would never be allowed in TradFi. While crypto market makers still make money off the trading spreads, the massive windfalls often come from those lucrative call options. 

For a firm like Jump, becoming the market maker for a token project meant unlimited upside with no real financial risk. “If you’re at Jump, you decide which one is going to win,” one crypto exchange founder tells Fortune, speaking on the condition of anonymity to discuss industry dynamics.

Although other companies from traditional finance were beginning to dabble in crypto—Jump’s Chicago trading rival, DRW, set up a blockchain division called Cumberland in 2014, for example—Jump quickly established itself as the main global liquidity provider in the sector, both through market making on exchanges and over-the-counter trading, which are generally higher-ticket transactions with more established players. 

As Jump’s crypto business swelled, so did its token deals—and its appetite for gains. Jump had its own venture capital arm, named Jump Capital, which meant that the firm might invest in a crypto company while also serving as the market maker for the project’s token. While the divisions were technically separate, even when the digital assets venture team was folded into Jump Crypto in 2021, the conversations would start with the same business development representatives. “The line between their VC and trading business was impossible to discern from the outside,” says the exchange founder, who met with Jump representatives about potential deals. Such an arrangement would be anathema in traditional finance.

Jump wasn’t the only firm profiting from call options in the largely unregulated sector. But while other market makers would ask for one or two percent of the total token supply, Jump would often ask for five percent—or higher—according to people familiar with the deals. “That’s an awful lot of ammunition for them to mess around with,” says one crypto founder, who tried negotiating a market-making deal with Jump in 2021, and asked for anonymity to discuss private negotiations. “You can end up with perverse incentives.” 

Still, Jump carried a gravitas. The firm represented buy-in from the world of TradFi years before BlackRock applied for its Bitcoin ETF, and it had the expertise to back it up. Even if Jump’s requirements for call options on token market making felt like “rip your face off deals” for budding companies, as one trader put it to Fortune, many were willing to pay. “You were made to feel like you were stupid if you didn’t want to accept their deal,” says the founder. “We’re Jump, do the deal the way we do the deal, or fuck off.” 

A public-facing role for a young crypto native

Even as Jump became known for its sharp elbows in dealmaking, Kanav Kariya presented an appealing face for the operation, projecting a kind of whiz-kid credibility—a necessity in crypto in a way it never was in TradFi. Crypto is a social industry, either in the trenches of Twitter or the backrooms of conferences, and Jump needed someone to look the part and help negotiate deals. Enter its trading wunderkind: Kariya. 

“They were trying to jive with the younger crowd,” said one crypto trader at a rival firm, who spoke on the condition of anonymity. “They’re not dumb.”

In an industry dominated by eccentric and often bellicose personalities, Kariya carries himself with a quiet authority. In YouTube interviews, he comes across as weary but engaged, speaking with a slight Mumbai accent and wry smile. In one from 2021, hosted by two Indian crypto entrepreneurs, Kariya said that he benefited from the more individualistic society in the U.S., which forced him to prioritize himself. And he said, with perhaps a touch of false modesty, that because all of Jump’s trading is automated by algorithms, he had no view of where markets were headed. “Don’t ask me what the price of anything is going to be 10 seconds in the future,” he joked.  

Photo by Eva Marie Uzcategui/Bloomberg via Getty Images

It’s perhaps no wonder that he looked tired: Kariya had been busy during his years at Jump, helping to build trading systems and grow the crypto team to over 150 people. Meanwhile Jump Capital, the firm’s venture arm, was devoting much of its resources to crypto, with the firm backing high-profile projects like Solana. 

In September 2021, two months before Bitcoin hit a peak of $69,000, the firm launched Jump Crypto to the public, with Kariya as its leader. Bill DiSomma and Paul Gurinas were still names known only to denizens of the Chicago trading scene, but Kariya was becoming a crypto celebrity, the subject of profiles and podcasts. “I don’t think you can think big enough,” he told Bloomberg about one in-house project. 

One sign of the firm’s newfound interest in public attention: Jump Crypto brought on a chief marketing officer—Nathan Roth, who had previously held the role at Hinge, helping spearhead the campaign “Meet someone worth deleting the app for.” The firm looked to a16z crypto, the venture giant, as a model to emulate, with the aim of molding Kariya into a figure like the blockchain philosopher king Chris Dixon, according to a person close to Jump. Do’s bombastic approach appeared to be another model. Privately, one of Kariya’s top deputies was exchanging emails with the head of public relations at Terraform Labs about getting Kariya more exposure, according to court documents.

But behind the scenes, Bill DiSomma was still pulling most of the strings at Jump Crypto, according to later testimony by the whistleblower who went to the SEC, James Hunsaker. “He ran that team,” Hunsaker told prosecutors. Kariya, meanwhile, was more in charge of business development. “He was kind of the public face of Jump Crypto,” Hunsaker said. 

During crypto’s bull run of 2021, it was all going swimmingly: Jump was everywhere, or at least trying to be. It partnered with FTX to build a decentralized exchange on Solana called Serum and tried to invest in the international exchange, where it operated as one of the top market makers. It even held talks to invest in FTX’s U.S. exchange, with the understanding that Jump would also serve as a liquidity provider on the exchange, although FTX.US balked at the aggressive terms, according to people familiar with the discussions, who spoke on the condition of anonymity to discuss private negotiations. A spokesperson for Jump declined to comment. 

Jump was not only market making and investing—it was also incubating its own projects, including a so-called bridge named Wormhole that would connect different blockchains and their tokens. The projects each served a purpose: In this case, Jump had amassed a cache of different cryptocurrencies, and there wasn’t a large enough market to absorb them all. “It really arose out of a necessity,” said one person familiar with the project. 

The stablecoin that wasn’t so stable

For all the excitement around Jump Crypto’s myriad efforts, Terraform Labs was its crown jewel. Founded by Do Kwon, a cocksure Stanford grad born in South Korea, Terraform promised to be crypto’s killer app—the long-awaited use case that would onboard actual people and not just blockchain enthusiasts. With its so-called stablecoin, combined with protocols that offered yields as high as 20%, Terraform seemed a safe way for casual investors to dabble in crypto. It amassed over a million users across the world. (Terraform did not respond to a request for comment.)

Jump Crypto never invested directly in Terraform as a traditional equity, but it did serve as its main market maker. Kariya, meanwhile, was drawn to Kwon, and developed an admiring rapport with him. The Terraform founder was just a few years his senior, but he had carved out a bully pulpit on the tumultuous arena of Crypto Twitter, becoming a brash presence in a cohort that included up-and-comers such as Sam Bankman-Fried. 

As revealed in court documents, Kariya and Kwon would text on the encrypted messaging platform Signal, alternating between business plans and banter. “I think I’m going to have to get a dog named Terra by the end of this year too,” Kariya texted in February 2021. “Name him Luna. Then it matches mine,” Kwon replied. “Hope you get carry from this,” Kwon added, referring to Kariya making money from Jump’s Luna position. “Better than just making bill [DiSomma] slightly richer lol.”

Photo by Filip Filipovic/Getty Images

The full details of the business arrangement between Jump and Terraform wouldn’t emerge until years later, when the SEC filed its lawsuit against Terraform and Kwon in early 2023, months after Terra’s final collapse. The commission laid out a damning case that Jump was not acting as a neutral market maker. Its financial prospects were tied to Terraform’s success through a lucrative call option if trading reached a certain volume, along with having insider access to Terraform’s operations, creating the type of conflict of interest that market structure regulation in TradFi seeks to avoid. A spokesperson for Jump declined to comment on this. 

James Hunsaker was on that fateful always-open Zoom meeting in May 2021, when TerraUSD’s peg failed for the first time and Kariya and DiSomma made the deal to defend it, netting the firm over a billion dollars and allowing Kwon to pretend that everything had gone according to plan. A year later, as TerraUSD collapsed and investors lost billions, Hunsaker decided the public had a right to know. (He also had around $200,000 of his own money in the failed stablecoin.) 

After failing to gain traction through anonymous Reddit posts and leaking information to an influential Twitter account called FatMan Terra, Hunsaker approached the SEC through its whistleblower program. As would emerge in later court testimony, he told attorneys everything. 

Even after that, Jump’s involvement in the Terra collapse would remain hidden from the public for almost a year. Meanwhile, Jump soldiered on, albeit wounded. Its in-house bridge, Wormhole, had suffered a $325 million hack in February 2022, which Jump quickly stepped in to backfill (and eventually managed to mostly recover). The firm likely lost north of a billion dollars on Terra’s ultimate collapse, although the figure was never confirmed. And after FTX collapsed, there were reports that Jump had nearly $300 million trapped on the exchange, although the creditor list released by the bankruptcy estate remains anonymous.   

Kariya still dutifully played the part of Jump Crypto frontman, appearing on industry podcasts to profess bewilderment over the rampant fraud exposed at FTX. “It’s fair to say we were mad,” he told one in February 2023. 

He would eventually retreat from the public eye, however. In May 2023, the SEC filed new documents that revealed Jump as the trading firm that had secretly propped up Terra. Kariya, alongside his boss DiSomma, was deposed by agency prosecutors a few months later. They both pleaded the fifth. 

A retreat from crypto

Jump no longer cuts the figure it once did in crypto. And as crypto markets have come roaring back in recent months, Jump is staying largely on the sidelines. Its engineers quietly continue to tinker with in-house projects, including a key Solana initiative called Firedancer. Jump also continues to make venture investments in crypto firms, including Figure Markets, Coinflow, and Lava Network—though at a much more lethargic clip than previously. 

But its reputation has taken a hit, and it has not escaped the notice of people across the crypto world that Jump has exited the token market-making game, no longer making the kind of lucrative deals that netted the firm billions. 

Courtesy of SEC

When the Bitcoin ETFs launched in January, Jump opted out of participating as a liquidity provider, even as rivals like Jane Street signed up. Meanwhile, the firm spun off two of its flagship projects, including Wormhole, moving them out of its incubator. Wormhole didn’t even ask Jump, its former parent, to serve as a market maker for its token when it launched in April 2024 with a trading volume over $1 billion, according to a person familiar with the matter. 

A heavy regulatory cloud hangs over Jump, though it has not been charged with any crimes. When the DOJ filed its own complaint against Do Kwon in March 2023, it mentioned Jump’s role in the 2021 peg incident. Meanwhile, as Fortune first reported in June, the Commodity Futures Trading Commission (CFTC) is investigating Jump’s crypto business.

And that cloud may be spreading to some of Jump’s brethren: Bloomberg reported last year that prosecutors had scrutinized for possible market manipulation the group chat conversations of employees at Jump and Jane Street in May of 2022 about a potential bailout of TerraUSD (which did not happen). Both declined to comment at the time. 

A photo taken at Kariya’s SEC deposition on the 2021 incident shows a face unrecognizable from his early days at Jump. He looks older than his years—shell-shocked and exhausted.

In the wake of Jump’s ignominy, the comparisons to Do Kwon and Sam Bankman-Fried were inevitable, but Kariya never quite fit the mold of his scandalous counterparts. Founders, rivals, and investors described him as bright, as an “old soul,” and as humble. “I don’t think anyone thought he was a slimy person,” says one. “My impression was that he was the fall guy.” 

On June 24, a few days after Fortune reported on the CFTC investigation of Jump, the intern-turned-president, who is now 28, announced his departure from the firm that had turned him into a crypto celebrity.

“Today marks the end of an incredible personal journey for me,” he wrote on X. “It’s my last day at Jump, a moment I’m receiving with both a heavy heart and great excitement about the road ahead.” People close to Kariya said that both sides had long been planning his exit. Although he posted that he would stay “engaged” with portfolio companies, his future in crypto looks uncertain. 

And the story of Jump’s rise and fall in crypto serves as a kind of cautionary tale. The firm tried to come into crypto as a kingmaker, wielding its depth of TradFi experience while taking advantage of the lack of regulation in the space. It wanted to be everything to everybody: a Chicago-style high-frequency shop, an engineering studio, and a venture firm. But ultimately “they were still too much of a trading firm,” was the assessment of one rival. “Their teeth were a bit too sharp.” 

Despite all its losses, Jump likely netted money from its crypto escapades. Still, it’s a comedown: High-frequency trading firms thrive by focusing always on their next trade, and Jump is missing all the action.

Hunsaker, the whistleblower, left in February of 2022 to found his own crypto company, Monad, with a former Jump Crypto coworker. They raised $225 million in April at a $3 billion valuation, with plans to launch a token. Jump did not participate.