Digital-asset prime brokerage firm FalconX has acquired Arbelos Markets, a derivatives startup launched in 2023 by two crypto industry veterans.
Terms of the transaction weren't disclosed. Bloomberg News reported on Tuesday that the transaction was expected to be financed through a mix of cash and FalconX stock, according to people familiar with the deal, who asked not to be identified because the discussions were private.
“Combining Arbelos's systematic trading expertise with FalconX's broad client base, large balance sheet, and regulatory leadership, we're uniquely positioned to address the growing demand for complex trading strategies and bespoke products,” Raghu Yarlagadda, chief executive officer of FalconX, said in a statement.
FalconX operates FalconX Bravo Inc., a swaps dealer focused on cryptocurrency derivatives that is registered with the Commodity Futures Trading Commission, and the firm said the acquisition will expand its derivatives business.
In October, Yarlagadda said he expected a “wave of consolidation” in the sector and that the company would actively hunt for acquisition targets. The acquisition comes after forecasts that pro-crypto President-elect Donald Trump's return to the White House will usher in a flurry of digital-asset mergers. Since November's election, Trump has appointed crypto-friendly regulators for key roles in his new administration, in addition to a crypto and artificial-intelligence czar.
In May, Arbelos announced a $28 million (roughly Rs. 240 crore) capital raise led by Dragonfly Capital, with FalconX as one of the investors in the round, alongside Circle Ventures, Deribit, Paxos and StarkWare.
The startup's founders, Joshua Lim and Shiliang Tang, are bankers-turned-crypto-traders. Lim previously led trading desks at Galaxy Digital and Genesis Global Trading, while Tang was formerly chief investment officer at LedgerPrime, which now operates as MNNC Group.
Founded in 2018, San Mateo, California-based FalconX was last valued at $8 billion (roughly Rs. 68,617 crore) when it raised $150 million (roughly Rs. 1,286 crore) in 2022. Its investors include Tiger Global, GIC and B Capital.
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