Decentralized derivatives exchange wins first BMA license, sets precedent

On November 13, 2025, in Hamilton, Bermuda, the Bermuda Monetary Authority (BMA) granted a Digital Asset Business License to DerivaDEX. This marks the first time a DAO-governed, non-custodial crypto derivatives platform has received formal regulatory approval. The move establishes a blueprint that other jurisdictions may examine.

“The future of digital finance depends on establishing a strong foundation of compliance, regulation, and customer protections in decentralized markets,” said the Honourable E. David Burt, JP, MP, Premier of Bermuda.

Bermuda demonstrates its commitment to supporting decentralized financial institutions through this approval, underlining the BMA’s expertise in regulating innovative financial products.

DerivaDEX was founded by veterans from DRW and Consensys and is financially backed by notable institutions such as Polychain Capital, Dragonfly Capital Partners, Electric Capital, and CMS Holdings. The platform combines high-speed trading capabilities with transparent, DAO-based governance.

Unlike centralized platforms, DerivaDEX emphasizes self-custody, allowing users to maintain full control of their assets while adhering to Bermuda’s regulatory standards. The model aims to reduce market risks, increase transparency, and eliminate single-entity control, particularly significant in light of past centralized exchange failures.

Crypto derivatives remain a massive market, with daily volumes on major exchanges frequently surpassing $50–100 billion. For instance, Binance futures volumes exceeded $2.5 trillion in July 2025, showcasing the sector’s scale. Similarly, decentralized platforms like Hyperliquid averaged $6.4 billion in daily trading volumes over three months, according to Blockworks Research.

With BMA approval, DerivaDEX caters to institutional investors, offering a secure and regulated avenue for trading crypto derivatives while addressing concerns around custodial risks and operational transparency.

Bermuda’s Digital Asset Business Act 2018 serves as a global standard for regulatory clarity. With successful applications from significant firms like Coinbase, Bermuda has emerged as a hub for exchanges seeking international recognition.

DerivaDEX aligns with the BMA’s framework by enabling non-custodial trading while maintaining licensed oversight. Its system ensures a transparent governance framework that adheres to the BMA’s stringent risk controls and regulatory obligations.

Built on a Trusted Execution Environment (TEE), DerivaDEX is designed to ensure order encryption until execution—effectively mitigating MEV (Miner Extractable Value) and information leakage. The platform promises sub-five millisecond acknowledgments for trades, along with one-minute deposits and ten-minute withdrawals, matching the performance of centralized venues.

Initial product offerings will include Bitcoin and Ethereum perpetual contracts, targeted at verified institutional traders. Future roadmap plans propose tokenized equity derivatives and prediction markets, conditional upon additional approvals and jurisdictional reviews.

In contrast to centralized platforms, DerivaDEX leverages DAO-based governance, allowing token holders—both retail and institutional—to actively manage risk reserves, treasury, and product development. This model not only aligns with regulatory oversight but also restores confidence in on-chain governance, especially for institutional actors.

By meeting regulatory standards, DerivaDEX resolves long-standing concerns surrounding DAO ecosystems, such as token holder reluctance to participate in governance due to regulatory uncertainty.

Aditya Palepu, CEO of DEX Labs, celebrated the milestone:

“This license removes the final barrier preventing institutions from participating in decentralized 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.”

Kendaree Burgess, Managing Director of Bermuda Business Development Agency (BDA), emphasized the balance Bermuda has achieved:

“The BMA’s approval of DerivaDEX demonstrates what’s possible when thoughtful regulation meets technological advancement. It proves that progress and accountability can coexist to form the frameworks the future of finance will rely on.”

Looking forward, DerivaDEX plans to initially cater to verified institutions while pursuing broader jurisdictional approvals to expand its product suite and geographic reach. Bermuda's regulatory regime positions it as a global leader, setting standards for the safe growth of decentralized financial markets.