Deribit’s EU Expansion Plans
In a strategic move, Deribit, one of the largest cryptocurrency derivatives exchanges, is gearing up to apply for a brokerage license in the European Union. This decision comes approximately a year after the platform faced a significant setback—a $28 million hack in early November 2023.
Strategic Shift: EU Over Dubai
In a recent interview with Bloomberg, Deribit’s Chief Commercial Officer, Luuk Strijers, shed light on the rationale behind choosing the EU for expansion. Strijers emphasized that the European Union is currently considered the “best environment to launch new products.” This marks a shift from earlier reports in 2023 that suggested the exchange was contemplating a move to Dubai.
“Is this the best environment to launch new products or should we defer? That’s what keeps us awake,” stated Strijers, underlining the pivotal decision-making process.
Anticipating Volatility in 2024
Deribit is gearing up for a significant development in early 2024— the launch of new options for Solana (SOL), XRP, and Polygon (MATIC). Notably, these altcoins have been classified as securities by the U.S. Securities and Exchange Commission (SEC). Strijers anticipates “some increased volatility” associated with these additions to the platform’s offerings.
As of press time, Deribit primarily offers options for Bitcoin (BTC) and Ethereum (ETH), making the introduction of Solana, XRP, and Polygon options a notable expansion.
Crypto Options Market Dominance
Founded in 2015, Deribit has established itself as a dominant player, controlling over 80% of the global crypto options market, according to data from Laevitas, a quantitative data analytics firm. Despite challenges, Deribit remains a key influencer in shaping the crypto derivatives landscape.
Resilience After $28 Million Hack
The exchange faced a setback in early November 2023 when it confirmed a $28 million exploit on one of its hot wallets. However, Deribit reassured its clients that the lost funds would be compensated through its emergency reserve funds. Importantly, this approach ensures that the insurance fund remains unaffected.
Global Expansion and Funding
Deribit’s commitment to expanding its services globally is evident in its strategic decisions. The exchange has raised $140 million over two funding rounds, garnering support from prominent investors such as 10T Holdings and Akuna Capital.
In conclusion, Deribit’s pursuit of a brokerage license in the EU and the planned expansion of its options offerings demonstrate the exchange’s resilience and ambition. As the crypto landscape evolves, Deribit remains a key player shaping the future of cryptocurrency derivatives trading. Investors and enthusiasts alike will be watching closely as the platform navigates new regulatory territories and introduces options for additional altcoins in 2024.
