(Bloomberg) -- Arkham Intelligence Inc., a blockchain data company backed by investors including OpenAI founder Sam Altman, is planning to launch a crypto derivatives exchange next month, according to a person familiar with the initiative.
The startup is relocating its operations from London and New York to Punta Cana in the Dominican Republic, where the company and its new venue will be based, said the person, who asked not to be named because the plans were not yet public.
Founded in 2020, Arkham currently runs a platform that analyzes blockchain data to provide information on the entities and individuals behind crypto market activity. Its investors include Bedrock, Draper Associates, Binance Labs and Altman, according to data on Pitchbook.
The exchange will be aimed at retail investors and seek to compete with platforms such as the world’s largest crypto exchange Binance, the person said. The new venue will not be open to US investors, according to the person. Arkham intends to operate the platform with a Dominican Republic free-trade zone license, which it is in the process of securing, the person added. The Dominican Republic’s FTZs offer tax exemptions and other fiscal 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 declined to its lowest in four years. Other large exchanges include Bybit and OKX.
Binance’s Crypto Market Share Declines to Lowest in Four Years
Derivatives trading activity on centralized exchanges reached $3.07 trillion in September, accounting for roughly 71% of total crypto total volume, according to CCData.
Arkham has been building the technology for the exchange internally for the past year and has been in discussions with investors in the Middle East to raise as much as $100 million to expand the venture, the person said. Its data platform, which is largely accessible for free, has around 880,000 monthly active users, which it hopes will give it a leg up in acquiring customers for the exchange, the person said.
The company has recently made a push to promote its brand among consumers by signing a two-season sponsorship deal with Turkish football team Galatasaray in July. The agreement will see it spend spend €1.8 million ($2 million) per season on the arrangement, getting its logo on players’ shirt sleeves.
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