(Bloomberg): Deribit, the world’s largest bitcoin and ether options exchange, plans to move to Dubai as early as the third quarter if authorities in the crypto-friendly emirate make regulations clearer. there is
Based in Panama from 2020, the trading platform is preparing to open a Dubai office of about 10 people, with a mix of core employees and local employers, said Deribit’s chief legal compliance and regulatory responsibility. director David Dohmen said in an interview. Some employees will continue to be based in Panama. Deribit’s Dutch-based parent company and associated subsidiaries now employ his 95 people worldwide, nearly double the number of the previous year.
The collapse of rival FTX cryptocurrency exchange in November shook confidence in the sector, resulting in capital outflows across the industry, including 10% to 15% on Deribit.
“We have a lot of clients who have basically hinted that they want to trade on a cryptocurrency exchange that is actually regulated,” Dormen said. “It is not regulated in Panama. We have also seen where the wind of regulation is blowing and we have seen movement towards regulation all over the world.”
A multinational hub in the sunny Middle East, Dubai has gone to great lengths to win over the world’s biggest corporations with its crypto-friendly policies. As some financial centers tightened regulations last year, many UAE officials touted crypto-assets as a key pillar of economic growth and diversification. Companies like Binance, the world’s largest cryptocurrency exchange, are expanding their operations in Dubai.
“We felt the entire regulatory system was more tailored to cryptocurrencies than other jurisdictions,” Domen said. “It’s more flexible. Governments and regulators welcome cryptocurrencies as a product.”
But the recent outburst of several crypto firms flocking to the United Arab Emirates has prompted a rethink of regulations in the Gulf state.The federal government introduced more formal rules earlier this month. Local lawyers said it could curtail some of the powers previously reserved for dozens of free zones around the country.
According to Domen, Deribit plans to submit a full market product license application and supporting documents to Dubai’s virtual asset regulator once it provides an update on the regulatory regime.
Deribit is also currently in the process of appointing a prominent auditor, according to Luuk Strijers, Deribit’s chief commercial officer. The company was profitable in 2022 despite being hit by the collapse of hedge fund Three Arrows Capital, he said.
Over the next few years, Deribit hopes to obtain broker licenses in countries such as the UK, Brazil and Singapore, according to Domen, in order to attract more clients to the exchange.
–With help from Anna Irera.
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