Deribit, the world's largest cryptocurrency derivatives exchange, aims to expand in Hong Kong, a sign of momentum as the market regulator looks to make the city a hub for virtual assets.
The Dubai-based company was drawn to Hong Kong because of its position as an international financial hub and its vibrant community of family offices and asset managers, which are increasingly interested in cryptocurrencies, said Jean-David Pequignot, the firm's chief commercial officer, who is based in the city.
"Hong Kong is this central financial hub in the world and a big one in Asia," he said. "If regulators can solve the derivatives piece, it is a place where we love to be."
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On Wednesday, the Securities and Futures Commission (SFC) unveiled a new road map of initiatives for the virtual-asset ecosystem. The plan includes studying the introduction of virtual asset derivative products for professional investors, or those with portfolios of at least HK$8 million (US$1 million).
Jean-David Pequignot, chief commercial officer of Deribit. Photo: Handout alt=Jean-David Pequignot, chief commercial officer of Deribit. Photo: Handout>
Crypto derivatives trading was the missing piece of what Hong Kong regulators currently allow, which was predominantly focused on licensing, Pequignot said.
"Derivatives can be speculative instruments for people who want to take leveraged bets into a market," he said. "They can be risky, but they are also very powerful instruments for hedging and risk management."
The risk-management element could help investors navigate fluctuations in the volatile crypto market, Pequignot said.
Deribit, licensed in Dubai, provides a trading platform for bitcoin and ether options. This derivative instrument gives traders the right to buy or sell an asset at a predetermined price at a specific time without immediate commitment to buy or sell the underlying asset.
"Asia is a big market for derivatives, with sophisticated investors who are highly speculative in nature," Pequignot said. "We want to be in Asia. We just need to find the right place and time to engage with regulators and get a regulatory framework to work with."
Singapore, another major Asian financial hub, has yet to establish regulations for crypto derivative trading.
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Hong Kong-based asset managers and family offices had a high appetite for crypto, said Pequignot. Some of his firms' biggest trading counterparties either had operations in Asia or dealt with Asian money directly, he added.
"We see an uptrend in adopting derivatives products in the crypto space," he said. The heightened interest has come from savvy individual investors, hedge funds and family offices.
Last year, Deribit recorded a 95 per cent year-on-year surge in trading volume to US$1.2 trillion, with a strong fourth quarter thanks to heightened optimism around the US presidential election and the US$100,000 bitcoin bull run that followed, the firm said last month.
With US President Donald Trump running a crypto-friendly administration, Deribit hoped to serve the US market once a suitable regulatory framework was in place, Pequignot said.
The firm, established in 2016, is in discussions with regulators in France and Brazil to acquire derivatives licences.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2025 South China Morning Post Publishers Ltd. All rights reserved.
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