Institutional Crypto Swap Dealer FalconX Raises $150 Million To Invest In Tech, Acquire Companies, And Expand Its Workforce

FalconX, a digital assets and cryptocurrency trading platform built from the ground up to help institutions manage their crypto strategies in one place, has raised $150 million in its Series D funding round.

This round led by Singapore-based GIC and California-based B Capital Group values the firm at $8 billion, with contributions from Thoma Bravo, Wellington Management, Adams Street, and Tiger Global Management. That’s more than double the $3.75 billion valuation the crypto firm received in August 2021.

With a market capitalization of $940 billion, making such large investments into crypto companies can be risky. This year’s market has been so bearish that many crypto companies are forced to downsize with some completely going under.

“You have some of the largest investors, some of the best investors…the raw mechanics are $150 million. What that signals is that excitement towards the mid to long term of crypto,” says CEO and Founder of FalconX Raghu Yarlagadda.

San Francisco-based FalconX is a prime brokerage platform that simplifies trading, credit, and clearing by offering companies the seamlessness of accessing multiple venues in one technology platform. With five offices globally, three in the U.S, FalconX is the first crypto firm that provides institutional investors with access to trading on the crypto derivatives market through a Commodity Futures Trading Commision-registered entity.

The firm recently doubled the number of its customers, and has increased monthly trading by more than 12 times, and while the company isn’t able to share the exact numbers the increasing net revenue was by 46 times from 2020 to 2021. However, the success last year could end up proving very relative, as Bitcoin hit an all time high of roughly $69,000 in November 2021 before quickly falling at the start of this year. The grandfather of crypto currently sits around $20,000.

No investors from this latest round will be joining the board. This series brings the total raised to $360 million. Yarlagadda says most of the recent funding for the four year old company will go toward investing into their products and technology, acquiring companies that fit its product portfolio, and hiring.

In April 2022, FalconX became the first crypto-focused swap dealer, or an entity that holds itself out as a dealer in crypto swaps, registered with the CFTC and a member of the National Futures Association. The CFTC registration allows its clients to enter into forwards, options, and swap transactions while the NFA safeguards the integrity of the derivatives market and ensures members fulfill their regulatory obligations.

“To the best of our knowledge, FalconX is the first and only cryptocurrency Swap Dealer registered with the National Futures Association (NFA) and one of the first crypto-focused Primary Level Members of the International Swaps & Derivatives Association (ISDA),” says Yarlagadda

However, in October 2021, the crypto exchange FTX.US acquired LedgerX, which was renamed FTX US Derivatives. This acquisition granted FTX with multiple licenses granted to LedgerX by the CFTC. The exchange was instantly given the ability to offer crypto futures, swaps and options to U.S. retail traders.

The capital raise coincides with a crackdown by the CFTC, which earlier this month charges heavily licensed cryptocurrency exchange Gemini for making false and misleading statements to the regulator; and last year charged 14 entities for operating without proper registration.