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Investor classification

  • Updated

In order to determine whether we can onboard our clients onto our regulated exchange in Dubai or onto Deribit Panama, which is a broker that executes orders on Deribit Dubai, we need to classify our clients.

There are three types of Investor Classifications:

  • Institutional Investor

  • Qualified Investor

  • Retail Investor

Qualified Investors and Institutional Investors can be directly onboarded onto Deribit FZE, the Dubai exchange.

Retail Investors who are eligible to trade derivative products are onboarded directly with Deribit Panama. For more information on eligibility to trade derivative products in your country, please refer to our list of Restricted Jurisdictions.

Investor classification

Details

Institutional Investor

An Institutional Investor means:

  1. Any entity regulated by a competent financial services regulator in the jurisdiction in which it is located;

  2. Any Virtual Assets Service Provider;

  3. Any government with relevant knowledge in respect of trading derivative contracts, demonstrated by providing documentation that reflects professional experience or product experience;

  4. Any institution which performs the functions of a central bank; or

  5. Any multilateral agency with relevant knowledge in respect of trading derivative contracts, demonstrated by providing documentation that reflects professional experience or product experience.

  6. Any legal entity that, based on the last annual accounts, certified by the CFO of the client or an external auditor, satisfies at least two of the following criteria:

    1. Balance sheet total of at least USD 20 million;*

    2. Net annual turnover of at least USD 40 million;**

    3. Own funds of at least USD 2 million.***

* Balance sheet total = total assets

** Net annual turnover = the revenue derived from the sale of products or provision of services falling within the company's ordinary activities, after deducting sales rebates, VAT, and other taxes directly linked to turnover (i.e. gross profit).

*** Own funds = funds of the company. Loans and credit facilities are excluded.

Qualified Investor - Legal entity

To be classified as a Qualified Investor, a legal entity has to meet both of the following criteria:

1) Maintain net assets of USD 1,000,000 (i.e. 3,750,000 United Arab Emirates Dirham). Net assets may include: 

  • Fiat currency (cash)

  • Financial instruments (stocks, bonds, derivatives, notes etc.)

  • Virtual assets, of which 100% of the value of non-algorithmic stablecoins (e.g., USDT, USDC) may be counted, while 50% of the value of all other virtual assets may be counted  

  • Tangible real estate.

Assets must be supported by documentary proof of funds demonstrating the relevant holdings (e.g. financial statements, bank statements, broker account statements, crypto platform statements, valuation report from real estate agencies).

AND

2) Its director(s) and/or trader(s) are required to have relevant knowledge of trading derivative contracts. This can be demonstrated through documentation showing either product experience (i.e. having conducted a minimum of 12 transactions in derivative contracts in the past 12 months)or professional experience (i.e. having worked for at least 12 months in the financial sector in a relevant role for an authorised firm or a professional services firm dealing with leveraged instruments). 

Qualified Investor - Individual

To be classified as a Qualified Investor, an individual has to meet both of the following criteria:

1) Earn an annual income of ≥ USD 191,000 (i.e. 700,000 United Arab Emirates Dirham);

OR

Maintain net assets of USD 1,000,000 (i.e. 3,750,000 United Arab Emirates Dirham). Net assets may include: 

  • Fiat currency (cash)

  • Financial instruments (stocks, bonds, derivatives, notes etc.)

  • Virtual assets, of which 100% of the value of non-algorithmic stablecoins (e.g., USDT, USDC) may be counted, while 50% of the value of all other virtual assets may be counted 

  • Tangible real estate excluding primary residence 

All assets must be supported by documentary proof of funds (e.g. bank statements, broker account statements, crypto platform statements, real estate valuation reports).

AND

2) Possess relevant knowledge of trading derivative contracts. This can be demonstrated through documentation showing either product experience (i.e. having conducted a minimum of 12 transactions in derivative contracts in the past 12 months)or professional experience (i.e. having worked for at least 12 months in the financial sector in a relevant role for an authorised firm or a professional services firm dealing with leveraged instruments). 

Retail Investor

A Retail Investor is an individual or legal entity that is not a Qualified Investor or an Institutional Investor.