Arkham Intelligence, a blockchain data analytics firm backed by OpenAI’s Sam Altman, will launch a new derivatives exchange in November.
The company will also shift its headquarters from London and New York to Punta Cana in the Dominican Republic to exploit the country’s free-trade zone incentives. This move is part of a larger strategy to reduce operating costs and expand its market presence.
Focus on retail investors and expansion plans
Arkham’s upcoming derivatives exchange will cater primarily to retail investors, offering a user-friendly platform to compete with major industry players like Binance, OKX, and Bybit. While specific details on the platform’s features remain under wraps, sources close to the company have emphasized that Arkham plans to introduce competitive tools and services to attract users. However, U.S. investors will not have access to the exchange due to regulatory restrictions.
Arkham Intelligence, a crypto firm backed by OpenAI's founder Sam Altman, is planning to launch a derivatives exchange https://t.co/o5T4GzcE1B
— Bloomberg (@business) October 11, 2024
The launch comes when the crypto market is seeing increased demand for derivatives trading, especially after the downfall of FTX, which created opportunities for new entrants. Arkham is reportedly in talks with investors from the Middle East, aiming to raise $100 million to fund its derivatives expansion.
Relocation to the Dominican Republic and market impact
Arkham’s decision to relocate to the Dominican Republic was likely influenced by the country’s favorable regulatory environment and lower operational costs. The company aims to leverage these benefits to establish itself as a formidable player in the crypto derivatives market.
The derivatives exchange industry is booming, with centralized exchanges recording over $3 trillion in trading activity in September alone, according to CCData. This accounts for 71% of the monthly crypto trading volume. Despite the seasonal dip in trading, Arkham’s entry is expected to disrupt the market, thanks to its existing user base of 880,000 monthly active users.
The firm’s native token, ARKM, responded positively to the news, surging by 15.5% to $1.55, with a market cap of around $344 million. Arkham’s growing visibility has also been bolstered by its recent sponsorship deal with the Turkish football team Galatasaray, designed to increase brand recognition in international markets.
Challenges in the U.S. market and regulatory landscape
While Arkham gears up for its global derivatives launch, the U.S. regulatory environment remains a significant challenge. U.S. authorities, including the SEC and the CFTC, have maintained a tough stance on centralized exchanges operating within the country. Arkham’s decision to exclude U.S. investors reflects these regulatory pressures.
The firm’s move to the Dominican Republic aligns with a broader trend of crypto companies seeking more favorable jurisdictions to avoid regulatory hurdles. Under the free-trade zone license, Arkham will benefit from tax advantages and fewer compliance burdens, positioning itself for rapid growth in the global derivatives space.
As Arkham prepares for its November launch, the company is set to capitalize on the growing demand for crypto derivatives despite regulatory challenges in key markets like the U.S. All eyes are now on its ability to compete with well-established exchanges and attract a significant market share.
The post Arkham Intelligence Prepares to Launch New Derivatives Exchange first appeared on Coinfea.
