Robinhood Markets (Nasdaq: HOOD), a popular American commission-free broker, has quietly ended its partnership with Chicago-based Jump Trading, a big name in the traditional finance industry, for facilitating crypto transactions, Coindesk reported, citing “a person familiar with the matter.”

On-chain data shows that the two companies stopped doing business together in July. However, there is no official confirmation as neither of the companies confirmed that it was the end of the partnership.

Robinhood and Jump Trading End Crypto Partnership

Jump Trade was the first company that supported Robinhood’s crypto trades when the broker entered the cryptocurrency markets in 2018. Jump Trading was an early mover in crypto and has been active in digital assets since at least 2017, earlier than most traditional finance companies, according to media reports.

However, Jump Trading is now reportedly pulling back from trading digital assets in the United States following an extensive regulatory crackdown in the industry. Jane Street Group, another major market maker, is backing up from the US crypto market.

The Crucial Role of Market Makers

Unlike crypto exchanges, Robinhood depends on market-making firms to offer commission-free crypto trading. It routes the orders to the best possible market makers and receives a commission, a controversial model known as the payment for order flow.

Robinhood generated a significant portion of its revenue from crypto trading over the years, but it dropped 18 percent to $31 million in Q2 2023. However, the company still holds $3 billion in Bitcoin, which is only after Binance and Bittrex.

Crypto trading on Robinhood became popular as it offered some of the trending tokens in the US, which were not offered by other leading exchanges in the country.

However, the California-headquartered firm re-evaluated its cryptocurrency listings following the Securities and Exchange Commission labeled several cryptocurrencies as unregistered securities in lawsuits against other companies and individuals. Robinhood, which offered trading with 18 cryptos earlier this year, delisted Cardano, Solana, and Polygon in June.