TechFlow Deep Dive: Uncovering the "Mastermind Behind the Crash" – The Jump Saga: From Intern to CEO in 4 Months
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TechFlow Deep Dive: Uncovering the "Mastermind Behind the Crash" – The Jump Saga: From Intern to CEO in 4 Months
By tracing Jump's development history in the cryptocurrency sector, we can uncover some clues about its true current state.
Navigating Web3 tides with focused insightsAuthor: Fortune
Translation: Azuma, Odaily Planet Daily
Editor's note: This article is a deep dive piece published by Fortune on July 11. Prior to its release, the U.S. Commodity Futures Trading Commission (CFTC) had already begun investigating Jump, and signs of dramatic internal shifts were emerging within Jump itself—its public face, Kanav Kariya, would soon resign.
A month later, rumors about Jump potentially "falling apart" have only intensified, and its selling pressure has accelerated market declines. In this article, we may find some clues about Jump’s true current state by tracing its journey through the cryptocurrency industry.
The Intern Who Became President Overnight
Internal communications at Jump Crypto typically happen over Zoom. In May 2021, a group of employees gathered in one such meeting to discuss a growing crisis.
Jump Trading, headquartered in Chicago, earned its reputation during the Flash Boys era with high-frequency trading at the turn of the century. But since then, the firm has gradually moved deeper into the volatile world of cryptocurrency.
Algorithmic stablecoin Terra (UST) was once the crown jewel of crypto projects, and Jump could be considered its silent partner. Terra aimed to maintain a $1 peg through complex algorithmic mechanisms tied to its native cryptocurrency LUNA, while Jump coordinated behind the scenes—supporting UST via trading activity. Yet despite Terra founder Do Kwon’s confidence, UST became de-pegged that May.
At the time, Jump had an opportunity to safely earn millions under its cooperation agreement with Terraform Labs (Terra’s developer), but continuing down this path risked Terra’s imminent collapse. Bill DiSomma, Jump’s co-founder, didn’t want to abandon this “pet project,” so he joined the Zoom call to seek a better solution.
Minutes later, a solution emerged. According to testimony Jump later provided in court, a 25-year-old intern named Kanav Kariya joined the meeting and proposed his plan.
Kariya said in the meeting: “I’ve talked to Do Kwon. They agree to give us options.”
What followed may have fundamentally altered the course of the cryptocurrency industry. According to court documents, in the following week, Jump secretly purchased large amounts of UST to create a false impression of strong demand, pulling the token’s value back toward $1. At the same time, Kwon agreed to deliver up to 65 million LUNA tokens to Jump at $0.40 each—an option price far below the secondary market peak of over $90 per LUNA.
According to later announcements by the U.S. Securities and Exchange Commission (SEC), Jump made a staggering $1 billion from this deal alone. Just months later, in September 2021, Kariya was rapidly promoted to president of Jump Crypto.
Meanwhile, this maneuver temporarily restored UST’s peg, allowing Kwon to boast on X (then Twitter) that UST had achieved “natural recovery.” According to court records, one Terra employee privately admitted in a text message: “Without Jump stepping in, we might’ve really been done for. Haha.”
Yet this controversial “savior act” could only delay, not prevent, Terra’s ultimate fate. A year later, when UST de-pegged again, Jump was powerless to intervene.
In May 2022, UST entered a death spiral, wiping out $40 billion in value within days. Countless investors lost their life savings. Crypto communities on Twitter and Discord filled with desperate pleas for compensation; some even threatened suicide. The collapse triggered a chain reaction across the entire cryptocurrency market, indirectly leading to FTX’s implosion in November 2022, and ultimately drawing heightened regulatory scrutiny to the industry.
Yet it wasn’t until 2023 that anyone learned Jump had been operating behind the scenes to support UST—only after the SEC filed a major fraud lawsuit against Terraform Labs and Kwon, partly based on testimony from James Hunsaker, a whistleblower from Kariya’s team. Terraform Labs and Kwon reached a $4.5 billion settlement with the SEC in June, though most of the amount may never be paid due to Terraform’s bankruptcy filing earlier this year. Kwon still faces criminal charges from the U.S. Department of Justice (DOJ) and awaits extradition from Montenegro. He continues to deny any wrongdoing. Terraform did not respond to our request for comment.
Although Jump has not been charged with any crimes, its dealings with Kwon clearly damaged its reputation—the exposure of trade secrets in one of the industry’s most sordid episodes. The release of whistleblower testimony in a New York federal court in March 2024 marked a significant setback for Jump’s foray into crypto.
Kariya declined to comment on these matters, and Jump’s spokesperson refused to allow any senior executives to be interviewed or issue statements. We spoke with more than two dozen former Jump employees, competitors, and industry traders—many of whom requested anonymity out of fear of retaliation. Despite reduced activity in crypto, Jump remains one of the industry’s most influential players, managing hundreds of millions of dollars.
On the surface, Jump’s “legend” fits neatly into blockchain industry narratives. But what sets Jump apart is that it was already a renowned giant in traditional finance—one that believed it could dominate this emerging market, like an adult entering a child’s game, walking away with billions. Ultimately, however, it received the same painful lesson as many others who thought themselves too clever.
As one former Jump employee told us: “Financial history must be written in blood.”
The Prodigy from Mumbai and the Titan from the Windy City
Since its founding in 2001, Jump Trading has become a key player in Chicago’s storied financial circles. Yet when 18-year-old Kariya enrolled at the University of Illinois in 2014, he had never heard of the company. Raised in a middle-class family in Mumbai, India, Kariya learned about top-tier U.S. undergraduate engineering schools from news reports and chose Illinois.
The harsh winters of the Urbana-Champaign campus didn’t deter him. A childhood fan of video games and war films, Kariya majored in computer science—a departure from many future colleagues who began coding as kids. On a podcast, Kariya later explained that a visit to Disneyland and several U.S. universities at age 13 cemented his desire to come to America: “The infrastructure and education quality looked incredibly appealing… every campus had computers.”
Within just a few years, Kariya landed an internship at Jump Trading and quickly rose through the ranks during crypto’s golden age. Today, Kariya’s name is nearly as well-known in crypto circles as Jump itself—though partly because other Jump executives avoided the spotlight, pushing Kariya forward instead.
By 2021, the 25-year-old Kariya had become president of the newly formed Jump Crypto division. With jet-black hair and a signature goatee, he frequently appeared on lists of tech rising stars and at crypto conferences, looking every bit the cowboy.
At the University of Illinois, Jump didn’t appear on official recruitment lists or post job ads publicly. Instead, they recruited students like Kariya through private referrals. Jump’s two founders, Bill DiSomma and Paul Gurinas, both started their careers at the Chicago Mercantile Exchange (CME), and both attended the University of Illinois.
At CME, traders shouted and jumped to bid (the inspiration for Jump’s name). DiSomma and Gurinas witnessed the online trading revolution dismantle their familiar world—and resolved to claim their share of it. In 1999, they co-founded Akamai, which they renamed Jump in 2001.
As Michael Lewis described in his book *Flash Boys* about the rise of high-frequency trading, firms like Jump (and rivals such as Jane Street and Citadel Securities) place immense value on secrecy. Their edge lies in technology—executing trades faster or spotting market inefficiencies ahead of others—and they guard these strategies obsessively.
John Lothian, a veteran of Chicago’s financial scene, recalled signing a non-disclosure agreement just to step through the front door of Jump’s headquarters in the Montgomery Ward Building along the Chicago River—even though he was merely requesting sponsorship for a community event, which Jump politely declined.
“They just don’t let people into the office,” Lothian told us. “It goes against their confidentiality principles.”
The 'Toy' Market
Jump’s approach to cryptocurrency mirrored its culture of secrecy. Former employees and those familiar with its operations say Jump initially dipped its toes cautiously into crypto, treating it as a “test ground” where interns could experiment freely—while keeping it isolated from core business lines.
By late 2015, Jump established a research and development office at its founders’ alma mater. The office funded academic projects and collaborated with professors on cutting-edge tech explorations, such as using VR headsets to simulate trading environments. It also hired undergraduates as interns, sourcing talent through word-of-mouth recommendations—how Kariya got in, via a friend’s referral.
Jump faced a constant challenge in training new hires: testing whether potential employees could spot subtle market opportunities and convert them into algorithmic trading models—without handing temporary staff access to its most critical strategies or billions in capital.
Cryptocurrency offered a perfect solution. It had tradable assets, exchanges, and unique characteristics, yet remained sufficiently isolated from Jump’s stock and bond markets to pose no direct threat.
A former Jump employee, speaking anonymously, told us: “It was kind of like a ‘toy’ market.”
For young people working on crypto at Jump, they weren’t entirely sidelined. In fact, DiSomma himself was intrigued by crypto’s vision of decentralized markets. Crypto advocates believe blockchain can eliminate intermediaries like brokers and clearinghouses altogether. As pioneers of the online trading revolution, having seen markets evolve from crowded CME pits to internet-based systems, DiSomma eagerly anticipated the next paradigm shift.
So when Kariya joined Jump as an intern in January 2017, he was assigned to build early crypto trading infrastructure—with almost no managerial oversight. As Kariya noted on a podcast in January 2023: “We were free to do our own thing… working in a completely sealed bubble.”
Then that bubble kept expanding. That same year, Bitcoin experienced its first major bull run, surging from under $1,000 at the start of 2017 to nearly $20,000 by December. According to a former employee, Jump’s crypto team gained increasing prominence within the company, becoming one of its top-performing units.
A clear shift occurred: crypto was no longer just an intern’s playground. Soon after the 2018 Bitcoin bubble burst, Kariya graduated and joined Jump full-time—his ascent had begun.
The Market-Making Giant
Firms like Jump are shrouded in mystery, primarily engaging in a practice known as “market making.”
When people go to exchanges, buyers need sellers and vice versa. Market makers act as intermediaries, competing to offer the best bid and ask prices. For market makers, the profit margin per trade may be tiny—just pennies per share—but driven by algorithms and executed at scale, it becomes a highly profitable business.
In traditional finance, market making is tightly regulated to prevent conflicts of interest. Market makers don’t directly partner with issuing companies but work with exchanges under regulatory supervision. Different functions—like market making and venture investing—are typically separated legally to avoid insider trading or market manipulation.
Crypto is entirely different. As an emerging “wild west” industry, it operates without decades-old rules. Michael Selig, a lawyer at Willkie Farr & Gallagher, a firm specializing in digital asset services, said: “In crypto, you don’t face that kind of direct regulation.”
Crypto market makers don’t just work with exchanges—they sign direct agreements with project teams, often helping launch tokens on exchanges, creating liquidity to attract traders and capital chasing the next hot token.
To do this, projects lend market makers large quantities of tokens to kickstart trading. Some market makers also negotiate for options—rights to buy large token amounts at steep discounts if the project succeeds. Selig says this inverted structure (market makers partnering directly with projects rather than exchanges) makes sense to some degree, as projects need high trading volume.
This unique model enabled something unthinkable in traditional finance: while market makers still earn from bid-ask spreads, massive profits often come from lucrative options.
For a firm like Jump, being a project’s market maker meant near-limitless profit potential without bearing real wealth risk. An anonymous crypto exchange founder told us: “If you work at Jump, you get to decide which token will succeed.”
While other traditional finance firms also entered crypto—such as DRW, Jump’s Chicago rival, which launched Cumberland, a blockchain arm, in 2014—Jump quickly established leadership through market making and OTC trading.
As Jump expanded in crypto, so did its appetite for returns. Jump has its own venture arm, Jump Capital, meaning it can invest in projects while simultaneously serving as their market maker. Although these divisions are ostensibly separate, after the VC team was integrated into Jump Crypto in 2021, business discussions often flowed through the same commercial team. The anonymous exchange founder said he dealt with Jump’s business staff during potential deals but externally couldn’t distinguish between Jump’s VC and trading arms. In traditional finance, this would be utterly unacceptable.
Jump isn’t the only market maker demanding options, but while others may ask for 1–2% of total token supply, Jump often demanded 5% or more. An anonymous founder negotiating with Jump in 2021 said: “That gave them massive firepower to cause disruption.”
Still, Jump wielded serious influence. Before BlackRock applied for a spot Bitcoin ETF, Jump was seen as the symbol of traditional finance entering crypto—and had the muscle to back it up. Even though Jump’s demands for options were somewhat “shameless,” as one trader put it, many project founders were willing to pay the price.
One project founder told us: “If you refuse Jump’s terms, you might feel stupid. They’re Jump. Their attitude is: you follow our rules, or you get out.”
The Man Pushed Into the Spotlight
Despite Jump’s aggressive trading style, Kanav Kariya projected a more approachable image for the firm—a genius aura highly valued in crypto, rare in traditional finance. Crypto is a deeply social industry, whether in Twitter debates or behind-the-scenes meetings. Jump needed a suitable public face for negotiations and deals—and Kariya fit the role perfectly.
An anonymous trader from a competitor said: “They tried to connect with younger people. They weren’t dumb.”
In an industry full of eccentric personalities and combative figures, Kariya came across as calm and authoritative. In YouTube interviews, though often appearing tired, he remained engaged, speaking with a slight Mumbai accent and a thoughtful smile. He humbly insisted that since all Jump trades were algorithmically executed, he had no insight into short-term price movements: “Don’t ask me what anything will be priced at in the next 10 seconds.”
His fatigue wasn’t surprising. During his years at Jump, Kariya worked tirelessly building trading systems and expanding the Jump Crypto team to over 150 people. Meanwhile, Jump Capital poured vast resources into crypto, backing star projects like Solana.
In September 2021, two months before Bitcoin hit its $69,000 peak, Jump Crypto was officially launched as a standalone crypto division, with Kariya as president. While DiSomma and Gurinas were legends in Chicago finance, Kariya was becoming a rising star in crypto, pursued by media outlets. In a Bloomberg interview, Kariya hinted at an internal project: “I think you can’t imagine how big it’ll be…”
Another sign of Jump’s focus on public image: Jump Crypto hired Nathan Roth as Chief Marketing Officer, who previously held the same role at Hinge and led the famous “Meet someone worth deleting the app for” campaign. Insiders say Jump Crypto modeled itself after a16z, aiming to turn Kariya into a figure like “blockchain philosopher” Chris Dixon. Kwon’s high-profile behavior may have been strategic too—court documents show Kariya’s senior deputy exchanged private emails with Terraform’s PR head discussing ways to boost Kariya’s visibility.
Yet behind the scenes, according to whistleblower Hunsaker, Bill DiSomma still held most of the power at Jump Crypto: “He’s leading that team. Kariya is largely the public face.”
Stablecoins Aren't So Stable
Jump Crypto’s many crypto operations drew attention, but Terraform Labs was the “crown jewel.”
Jump Crypto never invested in Terraform via traditional equity, but served as its primary market maker. Meanwhile, Kariya grew fascinated by Kwon, developing an admiring relationship. The Terraform founder was only a few years older, yet already a celebrity in the noisy crypto community, standing alongside figures like SBF.
Court documents reveal Kariya and Kwon exchanged messages on the privacy-focused platform Signal, covering both business plans and casual chat.
In February 2021, Kariya messaged: “I think by year-end I’ll have to get a dog named Terra too.”
Kwon replied: “Name it Luna. Then it’ll match my dog.”
Kwon also mentioned Kariya could personally profit from Jump-held LUNA: “Hope you benefit from it… beats just letting Bill DiSomma get rich, haha.”
The full extent of Jump and Terraform’s collaboration only surfaced years later—after the SEC sued Terraform and Kwon in early 2023, months after Terra’s final collapse. The SEC alleged Jump did not act as a neutral market maker: its revenue expectations were tied to Terraform’s success via options, and Jump even participated in Terraform’s internal operations—exactly the conflict of interest traditional financial regulations aim to prevent. Jump’s spokesperson declined to comment.
Whistleblower Hunsaker attended the May 2021 Zoom call when UST first de-pegged. Kariya and DiSomma struck a deal to defend UST, earning Jump over $1 billion and allowing Kwon to pretend everything was fine. A year later, as UST finally collapsed, Hunsaker felt the public deserved to know the truth—he personally lost around $200,000 in the process.
Hunsaker first tried leaking the truth anonymously via a Reddit post to influencer FatMan, but it went unnoticed. He then turned to the SEC. As later court testimonies revealed, Hunsaker disclosed everything to lawyers.
Even so, Jump’s role in the Terra collapse remained unknown for nearly a year. In the meantime, despite setbacks, Jump continued operating. Its internally incubated cross-chain bridge Wormhole suffered a $325 million hack in February 2022; Jump stepped in immediately to cover the shortfall (funds were eventually recovered in 2023). Jump likely lost over $1 billion in Terra’s final collapse—though unconfirmed. After FTX fell, reports suggested Jump had nearly $300 million trapped on the exchange.
Kariya faithfully played his role as Jump Crypto’s public face, expressing bewilderment on podcasts about the rampant fraud exposed at FTX. On a February 2023 podcast, Kariya said: “We’re angry.”
But eventually, Kariya had to retreat from public view. In May 2023, the SEC filed new documents revealing Jump was the hidden force propping up Terra. Months later, both Kariya and his boss DiSomma were subpoenaed by prosecutors. Both invoked their Fifth Amendment rights.
Odaily note: Under the Fifth Amendment of the U.S. Constitution, individuals have the right to refuse to answer questions in legal proceedings that might incriminate them. This is generally recognized as protection against self-incrimination.
Exit Stage Left?
Jump is no longer the crypto giant it once was.
Crypto markets have rebounded strongly in recent months (this article was written on July 11), but Jump has mostly stayed on the sidelines. Its engineers continue quietly working on internal projects, including Solana’s new client Firedancer. Jump still does venture investing, recently backing Figure Markets, Coinflow, and Lava Network—but activity has significantly decreased.
While its reputation has taken a hit, industry insiders have noticed Jump gradually exiting the token market-making business that once earned it billions, no longer engaging in those highly profitable trades.
When spot Bitcoin ETFs officially launched in January, even rivals like Jane Street stepped in as market makers—but Jump chose not to participate. Meanwhile, the company has spun off two flagship projects, including Wormhole. An insider revealed that when Wormhole relaunched in April 2024 with over $1 billion in trading volume, it did not hire its former parent company as a market maker.
Though not charged with any crime, Jump remains under heavy regulatory cloud. When the DOJ sued Do Kwon in March 2023, it referenced Jump’s role in the 2021 de-pegging incident. Meanwhile, the CFTC is also investigating Jump’s crypto operations.
This shadow may extend to peers. Bloomberg reported last year that prosecutors reviewed a 2022 May group chat between Jump and Jane Street employees discussing a possible UST rescue—which never materialized. Both firms declined to comment at the time.
When Kariya appeared before the SEC hearings regarding the 2021 events, his appearance was unrecognizable compared to his early days at Jump. He looked older than his years, shocked and exhausted.
After the scandal broke, many compared Kariya to Do Kwon and SBF. But Kariya differs from his scandal-plagued peers. Founders, competitors, and investors alike describe him as intelligent and humble: “I don’t think anyone sees him as shady. I think he’s a scapegoat.”
Days after news broke of the CFTC investigation (June 24), the 28-year-old who rose from intern to president announced he would leave the company that made him famous. Kariya wrote on X: “Today marks the end of a personal journey. It’s my last day at Jump.”
People close to him say the departure had been planned for some time. Though Kariya claimed he’d remain “involved” with Jump’s portfolio, his future in crypto looks uncertain.
Jump’s rise and fall in crypto serves as a cautionary tale. The firm tried to leverage its deep experience in traditional finance to dominate a lightly regulated frontier—to be everything: a Chicago-style high-frequency trading firm, a development studio, and a venture capital firm. But ultimately, “they’re still too much of a trading shop,” as a rival put it. “Their teeth are too sharp.”
Despite numerous losses, Jump likely still profited overall from its crypto ventures. But it’s still a major failure. For high-frequency trading firms, success depends on constantly chasing the next opportunity—and Jump has missed many.
Finally, let’s talk about the whistleblower, James Hunsaker. He left Jump in February 2022 and co-founded his own crypto project, Monad, with a former colleague. In April, they raised $225 million at a $3 billion valuation. Jump did not participate.
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