Source: financemagnates, 2024/1/3
Bloomberg reported today that FalconX, a major cryptocurrency brokerage firm, is in advanced talks to acquire Arbelos Markets, a crypto derivatives startup launched in 2023 by two industry veterans, Joshua Lim and Xiliang Tang.
Cash and Stock Deal
While the financial amount of the deal is still unknown, the transaction is expected to involve a mix of cash and stock. The two companies are likely to formally announce the deal in the coming days.
FalconX first showed interest in Arbelos earlier this year when it invested in the startup’s $28 million seed funding round. Dragonfly led the funding round with participants including Circle Ventures, Deribit, Paxos, and StarkWare. However, Arbelos’ valuation during that initial round and the expected acquisition deals remain undisclosed.
Meanwhile, a Seychelles-registered subsidiary of FalconX has settled with the Commodity Futures Trading Commission, paying $1.8 million for operating in the United States without registration. This was the first action taken by the U.S. regulator against a platform that “improperly facilitated access to digital asset exchanges.”
Meanwhile, FalconX was valued at $8 billion when it raised $150 million in 2022 from investors including Tiger Global, GIC, and B Capital. The company, which was founded in 2018, has raised a total of $430 million across multiple funding rounds. It operates from offices in the United States, the United Kingdom, Malta, India, Singapore, and Hong Kong.
FalconX initially invested in Arbelos Markets’ seed funding round. Financials for the potential deal or Arbelos’ valuation are still unknown.
Expanding Services to the Cryptocurrency Industry
Earlier this year, the company launched a dedicated foreign exchange desk in London. The office offers access to 20 forex pairs, including major currencies such as the US dollar, euro and British pound. It targets cryptocurrency trading firms, exchanges and brokers, offering access to fiat currency pairs, a service similar to traditional forex markets.
Meanwhile, a Seychelles-registered subsidiary of FalconX has settled with the Commodity Futures Trading Commission, paying $1.8 million for operating in the US without registration. This was the first action taken by the US regulator against a platform that “improperly facilitated access to digital asset exchanges.”
FalconX’s potential acquisition of Arbelos comes at a time when demand for cryptocurrency trading has skyrocketed. Raghu Yarlagadda, co-founder and CEO of FalconX, hinted at the company’s acquisition plans in his 2025 outlook.
“The cost of doing business in crypto will rise as more institutional players enter the market and regulations tighten. This in turn will lead to a wave of consolidation in 2025,” Yarlagadda said. “Currently, we are actively exploring potential acquisitions and evaluating relevant sectors and key players within them.”
