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Highlights
- Arkham Intelligence is taking on industry rivals with a new derivatives exchange
- The exchange rivalry is growing with new product innovation
- Regulation in the US remains a crucial bottleneck to watch
Arkham Intelligence, a crypto startup backed by OpenAI, has hinted at plans to pivot with the launch of a potential crypto derivatives exchange to take on rivals like Binance. A person familiar with the matter but who asked to remain anonymous noted that the new business is scheduled to launch in November in addition to the firm’s relocation plans.
Arkham Intelligence to Compete With Binance
Precisely, the blockchain data company that investors, including OpenAI founder Sam Altman, backs is planning a massive restructuring. As reported by Bloomberg, it intends to move its operations from London and New York to Punta Cana in the Dominican Republic.
From here, the company said it will administer all of its activities, including its new enterprise from Punta Cana. With the new derivatives exchange, its focus is on retail investors.
In a short while, Arkham Intelligence’s derivatives exchange may begin to compete with Binance. Binance is lauded globally as the largest spot and derivatives exchange by trading volume. Per data from CoinMarketCap, Binance boasts of a spot and derivatives volume of $12.7 billion and $47.6 billion respectively.
Competing with a business of this size would require intense work from Arkham Intelligence. Notably, the firm is off to a good start, including the appointment of executives who are knowledgeable and experienced in crypto trading.
Since its inception in 2020, Arkham Intelligence has functioned as a blockchain analytics platform. Explicitly, its primary activities involves analyzing blockchain data to provide information on the organizations and key players behind crypto market activity. In the course of these four years, Bedrock, Draper Associates, Binance Labs and Altman have invested in the company, according to data on Pitchbook.
Regulatory Concerns on Centralized Exchanges
Significantly, the regulatory landscape surrounding the Centralized Exchanges (CEXs) in the United States has not entirely favored the crypto industry. Crypto exchanges are constantly in a tussle with regulators, including the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
Oftentimes, the debacle is hinged on crypto firms’ request for regulatory clarity from these US authorities. On October 10, the SEC charged Chicago-based Cumberland DRW LLC with operating as an unregistered dealer in the crypto asset market.
Like many of these CEXs, Arkham Intelligence may not have it easy, especially if the SEC spot any discrepancies or violation of federal securities laws. Recently, Bitnomial, a popular crypto derivatives exchange, sued the SEC for overreaching its jurisdiction over XRP futures contracts.
By taking this step, Bitnomial’s case joined the list of legal battles that hinges on the SEC’s control over digital currency.
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