FalconX, a leading digital-asset trading and brokerage firm, is reportedly engaged in advanced talks to acquire Arbelos Markets, a derivatives startup launched in 2023 by a pair of crypto industry veterans. According to sources familiar with the deal, the transaction will be financed through a mix of cash and FalconX stock, with an expected announcement within the coming days.
The Deal
While the exact valuation of Arbelos is unknown, the acquisition is seen as a strategic move by FalconX to expand its presence in the digital-asset space. The deal comes amidst forecasts that President-elect Donald Trump’s return to the White House will lead to a surge in digital-asset mergers.
Background
Arbelos Markets was founded by Joshua Lim and Shiliang Tang, two seasoned crypto industry professionals with backgrounds in trading and finance. Lim previously led trading desks at Galaxy Digital and Genesis Global Trading, while Tang served as chief investment officer at LedgerPrime (now operating as MNNC Group).
FalconX, on the other hand, has established itself as a major player in the digital-asset space since its founding in 2018. The San Mateo, California-based firm was last valued at $8 billion after raising $150 million in 2022, with backing from prominent investors including Tiger Global, GIC, and B Capital.
Market Trends
The acquisition comes amidst a growing trend of consolidation in the digital-asset sector. In October, FalconX Co-Founder and CEO Raghu Yarlagadda predicted a "wave of consolidation" in the space, stating that the company would actively seek out acquisition targets to drive growth.
This prediction has been validated by recent deals, including Stripe Inc.’s $1.1 billion acquisition of stablecoin startup Bridge just before Trump’s election victory. The deal was seen as a signal that the sector may experience increased deal-making activity under Trump’s presidency.
Arbelos’ Fundraising
In May 2024, Arbelos raised $28 million in a funding round led by Dragonfly Capital, with FalconX among the investors alongside Circle Ventures, Deribit, Paxos, and StarkWare. The startup has established itself as a key player in the crypto derivatives market, providing liquidity to traders.
What’s Next?
While the details of the acquisition are still unclear, the deal is expected to be announced within the coming days. As the digital-asset sector continues to evolve, it will be interesting to see how FalconX’s acquisition of Arbelos Markets shapes the market landscape.
Timeline
- 2023: Arbelos Markets launches as a derivatives startup
- May 2024: Arbelos raises $28 million in funding round led by Dragonfly Capital
- October 2024: FalconX Co-Founder and CEO Raghu Yarlagadda predicts "wave of consolidation" in digital-asset sector
- Present day: FalconX engaged in advanced talks to acquire Arbelos Markets
