Startup Exchange Aims to Offer First EU Crypto Derivatives for Institutions

D2X has applied for approval from a Dutch regulator, which could come later this year

article-image

Source: Shutterstock

share

key takeaways

  • The startup just raised a seed round of €5 million, or $5.7 million, to expand its operations
  • At launch, D2X plans to offer bitcoin and ethereum cash-settled derivatives that are denominated in euros

An Amsterdam-based exchange is angling to become the first European Union-regulated entity offering institutional investors exposure to crypto derivatives.

D2X just raised $5.7 million in a seed round led by the blockchain-focused venture capital firm Tioga Capital Partners to support that effort. The company’s valuation was not disclosed. 

The startup has applied for a license from the Dutch regulator AFM, CEO Théodore Rozencwajg told Blockworks.

The goal is for AFM to grant D2X a multilateral trading facility (MTF) license by the end of the third quarter, Rozencwajg said. Because European regulators have reciprocity agreements with each other, the exchange could then market throughout the EU.

“We identified that there was huge demand in Europe, basically, for institutions wanting to get into the space and specifically in the derivatives segment, but adoption was still pretty slow,”  Rozencwajg said. 

Another investor joining the round, Flow Traders, is a leading crypto market-maker. The idea is to tap the firm for additional liquidity after D2X launches, Rozencwajg said.

At launch, which could come as soon as September, D2X plans to offer options and futures built on Bitcoin and Ethereum. The exchange won’t offer spot trading, focusing exclusively on cash-settled derivatives denominated in euros. 

Other exchanges have previously received MFT approvals from the United Kingdom, but Brexit has prevented them from being used for passport purposes. 

Rozencwajg came up with the idea for D2X while working with co-founder and chief technology officer Don van der Krogt at Netherlands market-maker All Options. The pair explored the possibility of starting an in-house crypto trading desk — which was too complex from a regulatory standpoint — before starting up D2X in late 2020.

D2X Team
D2X: Theodore Rozencwajg, CEO (center), Don van der Krogt, CTO (right) and Laetitia Grimaud, general counsel (Left)

The company raised a pre-seed round to kickstart operations and now has 13 employees, which Rozencwajg expects to grow to 30 by September 2022. The latest capital infusion will be deployed in three main areas: risk management, technology and regulation.

In addition to the Brussels-based Tioga Capital and Flow Traders, Darley Technologies, Fortino Capital, Picus Capital, Kima Ventures, and Philippe Jabre’s family office also participated in the round.

Laetitia Grimaud co-founded D2X with Rozencwajg and van der Krogt. Frederic Colette, formerly the head of Societe General’s prime brokerage, holds the title of chief operating officer.  Ernest van der Hout, previously the head of risk for clearinghouse LCH.Clearnet, is the exchange’s head of risk.


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Top Icon.png

Research

Osmosis thrived in H2 2023 on the back of increased DeFi activity deriving from recently launched Cosmos-related projects and better market conditions. With new value accrual mechanisms for the native token, Osmosis is well-positioned to continue its strong performance in 2024.

/

article-image

Hut 8 also announced it broke ground on a Texas mining site

article-image

Uniswap aims to become a “complete platform for swapping” following its latest product releases

article-image

Continued demand for bitcoin ETFs coupled with greater demand for bitcoin from exchanges is contributing to price moves, analysts say

article-image

Morpho Blue is designed in a way where risk management is externalized, Morpho Labs’ CEO said

article-image

Snowflake, a cloud-based data warehouse solution, has partnered with Dune to make curated blockchain data available to its clients

article-image

Crypto is fast and it’s only getting faster as bitcoin threatens to retest its own highs set more than two years ago