FalconX in Talks to Acquire Crypto Derivatives Firm Arbelos Markets

FalconX, a leading cryptocurrency prime brokerage firm, is reportedly in advanced discussions to acquire Arbelos Markets, a crypto derivatives startup founded in 2023. Bloomberg has reported that the deal will likely involve both cash and stock, although the financial terms remain undisclosed.

The acquisition discussions follow FalconX's early interest in Arbelos, demonstrated by its investment in the startup's $28 million seed funding round earlier this year. The round was led by Dragonfly, with participation from Circle Ventures, Deribit, Paxos, and StarkWare. Arbelos, which is headed by industry veterans Joshua Lim and Shiliang Tang, focuses on providing crypto derivatives trading services to institutional players.

FalconX, which was valued at $8 billion during its 2022 funding round, is actively expanding its services. The company has recently launched a dedicated foreign exchange desk in London, offering crypto trading firms access to fiat currency pairs—a move that mimics services available in traditional FX markets. The desk now covers 20 forex pairs, including major currencies such as the US dollar, euro, and British pound.

In addition to its expansion plans, FalconX is also facing regulatory scrutiny. A Seychelles-based subsidiary of the firm recently settled with the US Commodity Futures Trading Commission, paying $1.8 million for operating in the country without proper registration.

Raghu Yarlagadda, CEO and co-founder of FalconX, commented on the industry's evolving landscape, stating, "The cost of doing business in crypto will rise as more institutional players enter the market and regulations tighten. That, in turn, will trigger a wave of consolidation in 2025." Yarlagadda also revealed that FalconX is actively exploring potential acquisitions as part of its long-term growth strategy.