Crosschain Protocol has raised funds with a market cap of $2.5 billion, finalizing its separation from Jump Trading, which is scaling back its cryptocurrency operations due to scrutiny.
Cross-chain bridge platform Wormhole has raised $225 million from investors Coinbase Ventures, Multicoin Capital and Jump Trading at a $2.5 billion valuation, initially incubating the defi protocol in digital asset arm Jump Crypto.
Instead of shares, Wormhole issued token warrants to investors. These guarantees ensure that investors receive their allocated supply of cryptocurrency tokens released by the protocol.
The fundraiser was the final step toward resolving Wormhole’s departure from Jump’s umbrella following U.S. regulatory investigations and a security breach with its blockchain messaging tool. Additionally, Wormhole now operates under the management of Wormhole Labs.
The wormhole itself is now completely separate from the jump.
Dan Reecer, COO, Wormhole Foundation
Wormhole plans to deploy fresh capital to bolster its industry reputation and chart a new course after hackers siphoned off an estimated $320 million in 2022 in one of the largest hacks of all time. At that time, Jump Crypto stepped in and provided emergency funds to cover the 120,000 ETH shortfall caused by the lewd people.
The company later recovered Wormhole’s stolen assets with help from DeFi service provider Oasis.
Jump Trading is also phasing out its cryptocurrency business following the collapse of Terraform Labs in mid-2022, and the resulting legal action alleged the company generated $1.3 billion by inflating the price of Terra’s UST token.
Kanav Kariya, president of Jump Crypto, exercised his Fifth Amendment rights when he was disbarred by Securities and Exchange Commission (SEC) lawyers regarding the company’s role in the Terra ecosystem.
The SEC’s complaint also pointed to an unnamed U.S. trading firm that was involved in UST’s price manipulation, sparking speculation that Jump might be that company.