Robinhood (NASDAQ: HOOD) and Jump Trading, two companies that were previously working together on crypto-related initiatives, have now parted ways. Robinhood, a retail broker that entered the crypto sector a few years ago, had been supported by Jump Trading, a large firm focused on traditional financial services.
According to sources familiar with the matter, Jump Trading is no longer working with Robinhood. This news comes as Robinhood’s zero-fee crypto business model heavily relies on market-making companies to facilitate its billions of dollars in trading volume.
It appears that Jump is stepping back from the US markets, potentially due to increased regulatory pressure. On-chain data suggests that Jump and Robinhood ended their partnership late last month. Robinhood has not provided many details on this development, and Jump Trading has not commented on the matter as of yet.
There is limited public information available regarding the business relationship between the two companies. Robinhood’s recent financial reports have not mentioned Tai Mo Shan Ltd., the Jump subsidiary that handled Robinhood’s order flow, since at least Q4 2022.
Sources reveal that Robinhood is now working with different market-making companies, such as B2C2, which handles the majority of the company’s cryptocurrency flow, according to publicly available filings with the US Securities and Exchange Commission (SEC).
The exact reasons behind Robinhood and Jump’s decision to part ways remain unclear. However, the US government’s ongoing crackdown on cryptocurrencies has made it increasingly challenging for traditional finance institutions to continue their involvement in the crypto industry.
Jump Trading was one of the first companies to enable Robinhood’s crypto-focused business strategy and handled market making for its services during the historic bull markets of 2021.
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