DerivaDEX has launched a licensed crypto derivatives platform in Bermuda, becoming the first DAO-controlled decentralized exchange to operate with formal regulatory approval.
According to a statement from the platform, the exchange has received a T-license from the Bermuda Monetary Authority and has begun offering crypto perpetual swap trading to a limited number of advanced retail and institutional participants.
BMA’s T (Test License) is issued to digital asset businesses seeking to test a proof of concept.
DerivaDEX will support major crypto perpetual products at launch, and said it has plans to expand into additional markets, including prediction markets and traditional securities. According to the company, the platform combines off-chain order matching with on-chain payments to Ethereum, allowing users to maintain non-custodial control of their funds.
DerivaDEX also said that the platform, developed by DEXLabs, uses encrypted order processing and a trusted execution environment, and is aimed at mitigating front-running and other forms of market manipulation.
A decentralized autonomous organization (DAO) is a blockchain-based governance structure in which token holders collectively vote on decisions according to rules encoded in smart contracts, rather than relying on traditional management hierarchies.
Related: Fed document proposes initial margin weights for cryptocurrency-linked derivatives
Traditional asset managers move to DeFi infrastructure
The launch of DerivaDEX comes as traditional asset managers increasingly engage with decentralized financial infrastructure on public blockchains.
On February 11, BlackRock made its USD Institutional Digital Liquidity Fund (BUIDL), a tokenized US Treasury product, available on the decentralized exchange Uniswap. The move, which will allow institutional investors to trade tokenized funds on-chain, also included BlackRock purchasing an undisclosed amount of Uniswap’s governance token, UNI.
A few days later, Apollo Global Management agreed to acquire up to 90 million decentralized finance protocol Morpho’s governance tokens over four years, representing 9% of the token’s total supply of 1 billion. The $940 billion asset manager said the deal includes support for Morpho’s decentralized lending infrastructure.
These moves come as US lawmakers continue to debate provisions of the Digital Asset Market Transparency Act, a law aimed at defining how cryptocurrencies and decentralized finance platforms are regulated.
While major questions remain regarding stablecoin yields, crypto venture firms Paradigm and Valeant warned in January that uncertainty remains about whether the current bill could cause DeFi developers and infrastructure providers to face registration, know-your-customer requirements, or other compliance obligations set out for centralized intermediaries.
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