Crypto.com forged deal to buy two US trade activa from IG Group

crypto.com, the rapidly growing cryptocurrency exchange based in Singapore, has a deal with the IG Group to acquire two assets that would gain a foothold on the strictly regulated US derivative market.

The company that attracted attention last month than 700 million.

The deal would offer Crypto.com a way to offer US customers some derivatives and futures, an area that has proven to be difficult for crypto exchanges given the strict regulations for the provision of these risky investment products for private investors.

Kris Marszalek, CEO of Crypto.com, said the takeover "will give our customers access to a completely new series of financial instruments to supplement our current offer".

The deal includes the North American derivative Exchange (NADEX), which offers merchants binary bets, whether something will happen within a certain time frame, such as the increase or fall of a currency, a raw material or an index.

That can take up to five minutes. Option providers generally allow customers to increase their bets with borrowed money, which significantly increases the potential profits and the amount of losses to which consumers are exposed. NADEX says that customers are informed of their maximum potential profits and losses before the trade is carried out.

The IG Group will also sell your 39 percent participation in Small Exchange, an appointment exchange with a focus on retailers who last year with the support of leading Wall Street players such as Citadel Securities, Jump and Interactive Brokers as well as Peak6, a private equity vehicle from former Chicago option dealer Matt Hulsizer.

The groups said that the deal is expected to be completed in the first half of 2022, subject to official approval. Both companies should be brought under the Crypto.com brand, the stock exchange said, but its managing directors would remain in office.

June Felix, CEO of the IG Group, said the sales would enable the company to "further sharpen our focus" on the integration and expansion of its options and its future business via Tastytrade, the US brokerage, which it bought in January for $ 1 billion.

Although they are very lucrative, derivatives have proven to be problematic for some crypto groups, since the risky instruments in many countries are strictly controlled by the supervisory authorities.

A US Federal Court condemned the crypto operator Bitmex at the beginning of the year to pay a fine of $ 100 million under civil law because it offers crypto trading without appropriate permits.

The Commodity Futures Trading Commission, which regulates the US derivative market, raised the lawsuit in 2020 and claimed that Bitmex has "illegally operated a trading platform for cryptocurrency derivatives". Bitmex said at the time that it will "take responsibility extremely seriously and continue to work actively with regulatory authorities around the world".

crypto.com, a five-year-old company with 3,000 employees around the world, has recorded 20 times sales growth and dropped significant cash this year, said Marszalek of the Financial Times last month when trade with digital assets are booming.