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The Bermuda Monetary Authority has granted a digital asset business licence to DerivaDEX, marking the first time a DAO-governed decentralised derivatives exchange has received formal regulatory approval. The milestone establishes a global precedent for non-custodial trading infrastructure and provides a pathway for banks, hedge funds and asset managers to access crypto derivatives within a recognised legal framework.
DerivaDEX was founded by veterans from trading and technology platforms including DRW and Consensys, and is backed by investors such as Polychain Capital, Dragonfly Capital Partners, Electric Capital and CMS Holdings.
E. David Burt, JP, MP,
Premier of Bermuda
E. David Burt, JP, MP, Premier of Bermuda, said:
"The future of digital finance depends on establishing a strong foundation of compliance, regulation and customer protections in decentralised markets. Bermuda is committed to supporting decentralised financial institutions that share these same principles. DerivaDEX's licence demonstrates this support and also showcases our regulator, The Bermuda Monetary Authority's sophistication in digital assets and ability to regulate innovative financial products."
Following high-profile exchange failures that highlighted the risks of centralised custody, DerivaDEX represents a new generation of regulated, non-custodial trading designed to eliminate single-entity control and improve market transparency. The platform ensures users maintain full custody of assets whilst meeting regulatory obligations under BMA oversight.
Aditya Palepu, Chief Executive Officer,
DEX Labs
Aditya Palepu, Chief Executive Officer of DEX Labs, stated:
"This licence removes the final barrier preventing institutions from participating in decentralised derivatives markets. For the first time, they can trade with regulatory confidence, retain control of their assets, and operate within a governance framework that's fully transparent and ensures market integrity."
Daily crypto-derivatives volumes on major exchanges frequently exceed US$50–100 billion, with Binance alone recording over US$2.5 trillion in July 2025. Decentralised venues are also surging, with Hyperliquid averaging US$6.4 billion in daily trading over the past three months. With its BMA approval, DerivaDEX becomes the first exchange of its kind to offer institutions a licensed pathway to trade under recognised regulatory oversight.
Built on a Trusted Execution Environment architecture, DerivaDEX encrypts orders until execution, safeguarding participants against MEV exploitation and information leakage. The exchange achieves sub-five millisecond acknowledgement times, rivalling centralised exchanges, alongside one-minute deposits and ten-minute withdrawals.
Unlike centralised venues where trading fees flow to a single operator, DerivaDEX operates under a DAO-based governance framework designed to meet licensed oversight requirements. This structure enables token holders, including institutional participants, to manage platform risk reserves, treasury and product development in accordance with regulatory standards.
The BMA's digital asset business regime has become a recognised benchmark for regulatory clarity, attracting major exchanges and custodians seeking international legitimacy. Coinbase selected Bermuda as its first offshore jurisdiction before expanding globally.
Aditya Palepu added:
"Bermuda has taken a pragmatic approach to regulating digital asset markets. This licence demonstrates that decentralised exchanges can operate within established regulatory frameworks whilst maintaining the transparency and risk controls institutions require."
Kendaree Burgess, Managing Director,
Bermuda Business Development Agency
Kendaree Burgess, Managing Director, Bermuda Business Development Agency, said:
"The BMA's approval of DerivaDEX demonstrates what's possible when thoughtful regulation meets technological advancement — proving that we can balance progress with accountability and create the frameworks the future of finance will rely on. It also highlights the power of advocacy and collaboration within Bermuda's ecosystem, and our commitment to amplifying these milestones to enable continued innovation and sustainable growth across the industry."
DerivaDEX plans to launch its platform with Bitcoin and Ethereum perpetual contracts, initially available to verified institutional traders. Future product expansion, including tokenised equity derivatives and prediction markets, is subject to additional regulatory approvals. The company is also pursuing opportunities to broaden access across jurisdictions.
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