Cryptocurrency exchange OKX has secured a Markets in Financial Instruments Directive (MiFID II) license, allowing it to offer derivatives trading to institutional investors across the European Union (EU).
OKX’s Europe CEO, Erald Ghoos, announced the regulatory milestone on March 12, marking a major step for the exchange’s expansion in the region. The license enables OKX to cater to a more sophisticated segment of traders by offering regulated derivatives products.
MiFID II vs. MiCA: Understanding the Difference
While both MiFID II and Markets in Crypto-Assets (MiCA) regulations shape the EU’s crypto landscape, they serve different purposes.
- MiFID II applies to financial instruments, requiring crypto derivatives platforms to register before operating in the EU.
- MiCA, on the other hand, governs crypto-asset service providers dealing with cryptocurrencies that are not classified as financial instruments.
With this new license, OKX strengthens its foothold in the European market, joining a growing list of exchanges securing compliance with the EU’s evolving regulatory framework.
Institutional Demand Fuels Crypto Derivatives Growth
The crypto derivatives market has seen a surge in institutional interest, contributing to rising trading volumes. According to CoinMarketCap, OKX processed nearly $3.7 billion in spot trades on March 12 alone, reinforcing its position as one of the world’s largest exchanges by volume.
A November 2023 report by CCData valued the centralized crypto derivatives market at nearly $7 trillion, an 89.4% increase compared to the previous peak in March 2022. Meanwhile, a February 2024 report by EY projected that decentralized finance (DeFi) innovations would continue driving growth in the derivatives sector.
Despite past crypto firm bankruptcies and regulatory scrutiny, the EY report suggested that new products would emerge to meet investors’ evolving hedging and trading needs.
Europe: A Hotspot for Crypto Derivatives
OKX’s move follows Kraken’s MiFID license approval in February, where the exchange highlighted Europe as one of the most active regions for crypto derivatives trading.
Beyond derivatives, the European market plays a critical role in the broader crypto economy. CME Group recently identified Europe as the world’s second-largest cryptocurrency economy, contributing nearly 18% of global transaction volumes.
With OKX now licensed to operate under MiFID II, the exchange is well-positioned to capitalize on Europe’s growing demand for regulated crypto derivatives.
