- Recently, the founder of TechCrunch, Michael Arrington shared a series of Tweets. That portrayed the fact behind Deribit’s latest round of financing.
- According to the founder, the Holland-based exchange Deribit is an unregulated derivatives exchange.
- Further, he stated Deribit demanded a new round of financing to fund founders and early investors at the end of 2019.
Recently, the founder of TechCrunch, Michael Arrington shared a series of Tweets that portrayed the fact behind the latest round of financing for Deribit. However, Arrington pointing out his tweet of last week, detailed about the inside story of the leading bitcoin derivative crypto exchange Deribit.
Ok, so this crazy Derebit story I mentioned last week. https://t.co/p8oC8Ov1H4 It's a shakespearean drama. Press has been asking me (and everyone else) about it. Instead of saying it all off record, here's what I know.
— Michael Arrington 🏴☠️ (@arrington) June 10, 2020
Per Techcrunch founder, Deribit is an unregulated derivatives exchange
According to the founder, the Holland-based exchange Deribit is an unregulated derivatives exchange. However, the exchange shifted to Panama due to some legal matters. But, still operates in Holland with a great profit.
2/ Derebit is based in Holland. Unregulated derivatives exchange. European law came knocking, so the company moved to Panama (but execs still in Holland). Absolutely killing it. Super profitable. Unregulated helps with friction of course.
— Michael Arrington 🏴☠️ (@arrington) June 10, 2020
Further, he stated Deribit demanded a new round of financing. To fund founders and early investors at the end of 2019 with a valuation of $ 280 million. A Singapore-based financial advisory firm Spartan Group suggested Deribit to Arrow Capital and QCP Capital. That negotiate a warrant for about 10% of the company at that price.
4/ Spartan Group @thespartangroup in Singapore introduced Derebit to Three Arrows/QCP. Relevant later in the story. If there are heroes and winners in this story, Spartan are the heroes.
— Michael Arrington 🏴☠️ (@arrington) June 10, 2020
Now, the new shareholders, Arrow Capital and QCP Capital planned to sell these shares at an estimate of $700 million. However, Spartan moved out as it was against its market reputation. Ultimately, the QCP capital and Three Arrows Capital decreased the valuation to $350M or $375M. Further, it sold Deribit’s equity to third parties.
As per Arrington, It is Pure Capitalism
10/ This is pure capitalism, applied on shareholders of an unregulated financial entity, with a serious information deficit. It's hard not to be impressed with what's been accomplished here.
— Michael Arrington 🏴☠️ (@arrington) June 10, 2020
Besides this, the new buyer now learns that he has paid a higher premium and expresses his fury. The Spartan Group responded to this issue the Group has only offered consulting services for recent strategic financing. Along with this, it has only recommended Deribit to Three Arrows Capital and QCP Capital.
Arrington finally concluded that it is pure capitalism, functional to the shareholders of an unregulated financial entity. With a serious information deficit.
Furthermore, the CEO of Three Arrows Capital, SU Zhu, notified that each person associated in the business is happy.