Arkham Intelligence Inc., a blockchain data company backed by investors like Sam Altman, is preparing to launch a crypto derivatives exchange next month. A person familiar with the plans shared that the company is relocating operations to Punta Cana, Dominican Republic, from its previous bases in London and New York.
The new exchange will focus on retail investors and aims to compete with major platforms like Binance. However, the platform will not be open to U.S. investors, according to sources. Arkham is seeking to leverage tax benefits from the Dominican Republic’s free-trade zone (FTZ) license, which offers exemptions and fiscal perks.
Following the news, the ARKM token, Arkham’s native cryptocurrency, saw a surge of 19% to $1.52. ARKM’s market capitalization now stands at around $344 million.
About Arkham Intelligence
Founded in 2020, Arkham Intelligence operates a blockchain analytics platform. The company provides insights into crypto market activity and the entities driving it. Investors in Arkham include Draper Associates, Bedrock, Binance Labs, and Sam Altman, according to Pitchbook data.
Arkham’s platform has become popular for tracking blockchain movements. It currently boasts 880,000 monthly active users, most of whom use the platform for free. The company hopes this existing user base will help drive customer acquisition for its new exchange.
Entering the Crypto Derivatives Market
Arkham’s upcoming exchange will cater to retail traders in crypto derivatives. These complex financial instruments derive value from the underlying crypto assets, allowing traders to hedge risks or speculate on price movements. The market for crypto derivatives has exploded, with trading volumes on centralized exchanges reaching $3.07 trillion in September. Derivatives trading now accounts for 71% of the total crypto volume, according to CCData.
The platform intends to capture market share by offering innovative features and competitive trading options. Arkham has been working on the exchange’s technology for over a year. It aims to challenge established players like Binance, Bybit, and OKX.
Binance’s Market Share Shrinks
The launch of Arkham’s exchange comes at a critical time for the industry. Binance, the world’s largest crypto exchange, has experienced a decline in market share to its lowest point in four years. Regulatory actions against Binance and the collapse of FTX have reshaped the competitive landscape, creating openings for new entrants.
Arkham sees this moment as an opportunity to gain traction in the derivatives market, which is still dominated by large exchanges but undergoing rapid shifts.
Funding Push in the Middle East
Arkham is actively raising up to $100 million from investors in the Middle East to fuel the launch and expansion of the exchange. The funds will be used to scale operations, enhance technology, and drive customer acquisition. Securing this investment would give Arkham the financial muscle needed to compete in the crowded market.
Why Punta Cana?
Arkham’s decision to relocate to Punta Cana is strategic. The Dominican Republic’s free-trade zones (FTZs) offer tax benefits and fiscal incentives that make it attractive for businesses. By securing a FTZ license, Arkham will benefit from reduced costs, giving it an edge over competitors operating in higher-tax jurisdictions.
The tropical location also reflects a shift in the crypto industry, with more companies setting up in friendly offshore environments to avoid strict regulatory scrutiny in countries like the U.S.
Crypto Derivatives: A Growing Market
The crypto derivatives market is growing fast. Traders use futures, options, and swaps to manage risk or speculate on price movements. The high volatility of crypto assets makes derivatives especially attractive to active traders and institutions.
With $3.07 trillion in derivatives volume traded in September alone, this segment represents a lucrative opportunity. Arkham aims to carve out a niche by targeting retail traders and offering a user-friendly platform that leverages insights from its analytics platform.
Leveraging Blockchain Data for an Edge
Arkham’s blockchain analytics platform provides a unique advantage. The platform gives detailed insights into on-chain activities, helping traders identify patterns and trends in real-time. By integrating these analytics into the new exchange, Arkham hopes to attract users looking for a data-driven trading experience.
The exchange will likely feature advanced tools that give traders a competitive edge by offering real-time blockchain data integrated with trading options.
A Shift Away from U.S. Markets
Arkham’s new exchange will exclude U.S. investors from participation. The decision reflects the growing regulatory challenges faced by crypto companies in the U.S. Many firms are shifting operations overseas to avoid regulatory uncertainty and heavy compliance costs.
With the Dominican Republic’s favorable environment, Arkham can operate more freely and attract users from global markets. The focus on non-U.S. retail traders aligns with the company’s strategy to expand in emerging markets.
A New Player in the Global Arena
Arkham’s entry into the crypto derivatives space positions it as a challenger to established giants like Binance, Bybit, and OKX. The shrinking market share of Binance creates an opening for nimble new players to capture users seeking alternatives.
Arkham’s existing user base of 880,000 active users gives it a strong starting point. The company hopes to convert these users into traders on the new platform by offering a seamless transition between its analytics platform and the exchange.
The Road Ahead
The launch of Arkham’s exchange marks an important milestone for the company. By raising funds from Middle Eastern investors, leveraging FTZ benefits, and targeting retail traders, Arkham aims to become a major player in the fast-evolving crypto space.
The company will need to differentiate itself with innovative offerings and user-friendly tools to stand out. Arkham is betting that advanced blockchain data integrated with its platform will appeal to traders looking for actionable insights.
The success of the exchange will depend on Arkham’s ability to attract liquidity and build trust among traders in a highly competitive market.
Conclusion
Arkham Intelligence’s move to launch a crypto derivatives exchange is a bold step in a rapidly shifting industry. By relocating to Punta Cana and leveraging FTZ benefits, the company is positioning itself to compete with the largest players in the market.
With Binance’s market share shrinking, Arkham sees an opportunity to capture a share of the booming derivatives market. The company’s focus on retail investors and integration of blockchain analytics gives it a unique edge.
Arkham’s ability to raise $100 million from Middle Eastern investors will be crucial to its expansion efforts. As the crypto market continues to evolve, the company aims to provide traders with advanced tools and a competitive trading environment.
The launch of the exchange represents a new chapter for Arkham. With a solid user base, innovative technology, and a strategic location, the company is well-positioned to make a mark in the global crypto derivatives space.
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