Cryptocurrency prime brokerage FalconX is nearing a deal to acquire Arbelos Markets, a crypto derivatives startup founded in 2023 by industry veterans Joshua Lim and Shiliang Tang, according to a report by Bloomberg.
While the financial terms of the acquisition remain undisclosed, the transaction is expected to involve a mix of cash and stock. An official announcement is anticipated in the coming days.
FalconX has had its eye on Arbelos for some time, participating in the startup’s $28m seed funding round earlier this year, which was led by Dragonfly and included notable investors such as Circle Ventures, Deribit, Paxos, and StarkWare. The valuation of Arbelos during that funding round and for this acquisition has not been publicly revealed.
FalconX itself achieved a valuation of $8bn following a $150m funding round in 2022, backed by investors including Tiger Global, GIC, and B Capital. Since its founding in 2018, FalconX has raised $430m across multiple funding rounds and operates in several major financial hubs, including the US, UK, Malta, India, Singapore, and Hong Kong.
The acquisition of Arbelos aligns with FalconX’s strategy to expand its offerings in the fast-evolving crypto industry. Earlier this year, the firm launched a foreign exchange desk in London, providing access to 20 major forex pairs like the US dollar, euro, and British pound. This service targets crypto trading firms, exchanges, and brokers, bridging the gap between traditional and crypto FX markets.
FalconX has faced regulatory challenges, with its Seychelles-based subsidiary recently settling a $1.8m case with the Commodity Futures Trading Commission (CFTC) for operating in the US without proper registration.
