(Bloomberg) — Arkham Intelligence Inc., a blockchain data company backed by investors including OpenAI founder Sam Altman, plans to launch a crypto derivatives exchange next month, according to a person familiar with the initiative.
Most read from Bloomberg
The startup is moving its operations from London and New York to Punta Cana in the Dominican Republic, where the company and the new location will be based, said the person, who asked not to be named because the plans were not yet public. The Arkham token, a cryptocurrency known as ARKM with a market capitalization of about $344 million, rose 19% to $1.52 after the news.
Founded in 2020, Arkham currently operates a platform that analyzes blockchain data to provide information about the entities and individuals behind the crypto market activity. Investors include Bedrock, Draper Associates, Binance Labs and Altman, according to data on Pitchbook.
The exchange will be aimed at retail investors and try to compete with platforms such as the world’s largest crypto exchange Binance, the person said. The new location will not be open to U.S. investors, according to the person. Arkham plans to operate the platform with a free trade zone permit for the Dominican Republic, which is currently being secured, the person added. The Dominican Republic’s FTZs offer tax exemptions and other tax benefits.
A spokesperson for Arkham declined to comment via email.
By launching a derivatives platform, Arkham is seeking to capture a lucrative slice of the cryptocurrency market, which has undergone significant changes since a slew of regulatory actions against Binance and the high-profile collapse of its former competitor FTX. While crypto derivatives trading is still dominated by Binance, its market share has fallen to the lowest level in four years. Other major exchanges include Bybit and OKX.
Binance’s crypto market share falls to its lowest level in four years
Derivatives trading activity on centralized exchanges reached $3.07 trillion in September, representing approximately 71% of total crypto volume, according to CCData.
Arkham has been building the technology for the exchange internally over the past year and has been in talks with investors in the Middle East to raise as much as $100 million to expand the business, the person said. The data platform, which is largely free to access, has about 880,000 monthly active users, which will hopefully give it an edge in acquiring customers for the exchange, the person said.
The company recently made an effort to promote its brand among consumers by signing a two-season sponsorship deal with Turkish football team Galatasaray in July. Under the agreement, the company will spend €1.8 million ($2 million) per season on the arrangement, which will see the logo placed on the players’ sleeves.
(Second chart will be updated with token price after the news.)
Most read from Bloomberg Businessweek
©2024 BloombergLP
