FalconX Set to Acquire Cryptocurrency Derivatives Platform Arbelos

In a move that highlights the increasing trend of consolidation in the digital-asset industry, digital-asset trading and brokerage firm FalconX is reportedly in advanced talks to acquire Arbelos Markets, a derivatives startup founded by two crypto industry veterans. The transaction, which is expected to be announced in the coming days, will be financed through a mix of cash and FalconX stock.

Background on the Acquisition

Arbelos Markets was launched in 2023 by Joshua Lim and Shiliang Tang, both of whom have extensive experience in the crypto industry. 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. The startup has been actively involved in providing liquidity for crypto derivatives.

Why This Acquisition Matters

The acquisition comes on the heels of forecasts that President-elect Donald Trump’s return to the White House will herald a flurry of digital-asset mergers. Trump, once a crypto skeptic, has vowed to make America a linchpin for the digital asset sector and appoint regulators with a friendly stance toward the asset class.

FalconX Co-Founder and Chief Executive Raghu Yarlagadda has previously stated that he expects a ‘wave of consolidation’ in the sector, adding that the company would actively hunt for acquisition targets. This move appears to be a testament to FalconX’s commitment to expanding its presence in the digital-asset industry.

Context: The Digital-Asset M&A Boom

The potential acquisition is part of a broader trend of deal-making in the digital-asset sector. In October, Stripe Inc.’s $1.1 billion swoop for stablecoin startup Bridge was viewed as another signal that deal-making in the sector may heat up.

Financial Details and Investors

Arbelos Markets announced a $28 million raise led by Dragonfly Capital in May 2024. FalconX was among the investors in the round, alongside Circle Ventures, Deribit, Paxos, and StarkWare. The exact valuation of Arbelos Markets is unknown.

FalconX itself has undergone significant growth in recent years. Founded in 2018, San Mateo, California-based FalconX was last valued at $8 billion when it raised $150 million in 2022. It’s backed by investors including Tiger Global, GIC, and B Capital.

The Future of Digital-Asset Mergers

The acquisition is expected to be announced in the coming days, with people familiar with the deal stating that the transaction will be financed through a mix of cash and FalconX stock. While the exact terms of the deal remain unclear, this move highlights the increasing trend of consolidation in the digital-asset industry.

As President-elect Trump vows to make America a linchpin for the digital asset sector, it’s likely that we’ll see more deals like this in the coming months. With FalconX’s reputation as a major player in the industry and Arbelos Markets’ expertise in derivatives, this acquisition has the potential to be a significant development in the world of digital assets.

Key Takeaways

• Digital-asset trading firm FalconX is reportedly in advanced talks to acquire Arbelos Markets, a derivatives startup founded by two crypto industry veterans.
• The transaction will be financed through a mix of cash and FalconX stock and is expected to be announced in the coming days.
• This acquisition comes on the heels of forecasts that President-elect Donald Trump’s return to the White House will herald a flurry of digital-asset mergers.
• FalconX Co-Founder and Chief Executive Raghu Yarlagadda has previously stated that he expects a ‘wave of consolidation’ in the sector, adding that the company would actively hunt for acquisition targets.

What’s Next?

As we move forward, it will be interesting to see how this acquisition impacts the digital-asset industry as a whole. With FalconX’s reputation as a major player and Arbelos Markets’ expertise in derivatives, this deal has the potential to be a significant development in the world of digital assets.

One thing is certain: with President-elect Trump’s promise to make America a linchpin for the digital asset sector, we can expect more deals like this in the coming months. Stay tuned to see how this acquisition plays out and what it means for the future of digital-asset mergers.