Crypto.com Acquires US CFTC-regulated Exchanges

key takeaways

Crypto.com announced today that it had purchased Nadex and the Small Exchange from IG group for $216 million
The deals are expected to close in the first half of 2022, and will give Crypto.com a regulated footprint in the US for derivatives and futures offerings similar to how FTX bought its way into the US market via its LedgerX acquisition

Digital assets exchange Crypto.com, which recently bought the naming rights to the Staples Center in Los Angeles for $700 million on a 20-year deal, has made two strategic acquisitions to expand its footprint in the United States and open the door to regulated derivatives and futures offerings in the market.

According to a release sent out by the company during the UK trading day, it has acquired from IG Group the North American Derivatives Exchange (Nadex) and its 40% stake in Small Exchange.

Nadex is best known for its retail-focused derivatives products, while Small Exchange is known for its futures offerings. Both are based in Chicago and are regulated by the Commodity Futures Trading Commission (CFTC).

“This proposed acquisition builds on that promise and will give our customers access to an entirely new set of financial tools to complement our current offering,” Kris Marszalek, Co-founder and CEO of Crypto.com, said in a statement.

While both brands will fold under the Crypto.com banner, the CEOs of both companies will remain in place.

For Crypto.com, this gives the company a foothold in the regulated crypto derivatives market, which has more volume than the spot market. According to CoinGecko, the derivatives perpetuals market has a 24-hour volume of $249.3 billion, while the spot market has a 24-hour volume of $156.7 billion.

“This deal supports IG’s strategic objectives by delivering a significant return on the previous investments made in Nadex and Small Exchange and now sharpening IG’s focus on growing and expanding the US options and futures businesses,” said June Felix, IG Group’s CEO, in a statement.

Back in August, FTX’s US branch made a similar play when it acquired regulated digital currency futures and options exchange LedgerX to build its FTX.us derivatives business. FTX’s unregulated offshore derivatives business currently posts around $17.8 billion in volume. FTX said that it will first offer bitcoin and ether perpetuals through LedgerX — now FTX US Derivatives — and then work with the CFTC to expand into other offerings.

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