Originally published on: October 17, 2024
Fracture Labs, a crypto game developer, has filed a lawsuit against Jump Trading, accusing the firm of engaging in a “pump and dump” scheme involving its DIO gaming token.
According to the lawsuit filed in an Illinois District Court, Fracture Labs entered into an agreement with Jump in 2021 to assist with the initial offering of its DIO token on the crypto exchange Huobi, now known as HTX.
As part of the agreement, Fracture Labs claims it loaned 10 million DIO tokens to Jump, valued at $500,000, and sent an additional 6 million tokens, worth $300,000, to HTX. Following the launch, online influencers promoted the DIO token, causing its price to spike to $0.98 before Jump allegedly sold off all the holdings, leading to a significant price drop.
Fracture Labs alleges that Jump Trading then repurchased the tokens at a much lower price, resulting in a devaluation of the DIO token and making it challenging for the developer to attract investors.
The lawsuit accuses Jump Trading of fraud, deceit, civil conspiracy, breach of contract, and breach of fiduciary duty. Fracture Labs is seeking a jury trial, damages, and disgorgement of profits from Jump Trading.
HTX, the crypto exchange where the alleged scheme took place, was not named as a defendant in the lawsuit. Both Jump Trading and HTX have yet to respond to requests for comments on the matter.
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