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Two of the largest trading desks in crypto have alerted clients that they will stop making markets in XRP

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Jump Trading, the secretive Chicago-based high-frequency trader, and Mike Novogratz’s Galaxy Digital have stopped making markets in XRP after the Securities and Exchange Commission filed a lawsuit against Ripple, according to sources.

Jump Trading is one of the most active firms in the crypto market and is known for providing liquidity to exchanges. The firm is also known for its secrecy; it reveals little information on its website aside from where its offices are located. Galaxy is another prominent crypto market maker, operating a desk that saw volumes top $1.4 billion in the third quarter.

According to three industry sources, Jump told counter-parties it would no longer provide liquidity for XRP. A spokeswoman for Jump Trading declined to comment. 

Meanwhile, Galaxy Digital has suspended trading in the digital asset until further notice. "We are not trading but will continue to evaluate as facts become available," a spokesperson from Galaxy told The Block.

"End of an era," a trading executive in the industry said about developments. Without proper liquidity provision in XRP markets, spreads could widen and it would become harder for investors to get in and out of large positions. 

The moves represent a big blow to the cryptocurrency, which is closely associated with San Francisco-based Ripple.

Earlier this week, the SEC sued Ripple and its co-founders Chris Larsen and CEO Brad Garlinghouse for conducting an initial coin offering to launch XRP. The sale is considered an unregistered sale of securities, in the agency's view.

Since the suit was filed Tuesday, a number of firms have cut off support of XRP for their products. Bitwise said this morning it would liquidate its Bitwise 10 Crypto Index Fund's 3.8% position in XRP. Elsewhere, several crypto exchanges, including OSL, CrossTower and Beaxy, have halted XRP trading.

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Oct 15, 2021, 2:54AM UTC
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