FalconX Acquires Majority Stake in Monarq Asset Management’s Parent Company

FalconX has acquired a majority stake in Monarq Asset Management’s parent company, previously linked to FTX. The firm aims to enhance its institutional client base and service offerings. This follows FalconX’s expansion efforts following its acquisition of Arbelos Markets and a partnership with Standard Chartered. It also boasts a massive trading volume but faced regulatory challenges from the CFTC in the past.

FalconX, a prominent crypto prime brokerage, has taken significant strides recently by acquiring a majority stake in Monarq Asset Management’s parent company, which was previously affiliated with the now-defunct FTX exchange. A report from Bloomberg on June 2 indicates that this strategic acquisition aims to enhance FalconX’s service offerings while expanding its institutional client base.

Monarq Asset Management, once known as MNNC Group, is registered in the Cayman Islands. The firm has had quite the journey, originally operating under the name LedgerPrime as part of the FTX network before its unfortunate downfall. Details regarding the financial terms of the acquisition have not been made public, leaving some questions unanswered.

Since its inception in 2018, FalconX has diligently sought to grow its influence in the crypto market. Earlier this year, it acquired derivatives startup Arbelos Markets, and in May, it partnered with Standard Chartered, focusing on the expansion of institutional crypto banking. These moves seem to reflect FalconX’s ambition to establish a more diverse range of services.

The addition of Monarq to its portfolio could be a game-changer for FalconX, enabling the broker to access a broader array of institutional clients beyond just hedge funds and asset managers. Among potential benefits are enhancements to their quantitative models and further growth of their talent pool.

In addition to its expansion efforts, FalconX has been marked by notable trading volume claims. The company describes itself as the largest digital asset prime brokerage globally, boasting over $1.5 trillion in trading volume and tapping into an impressive 94% of the global liquidity in digital assets. However, the firm recently faced regulatory scrutiny, settling with the US Commodity Futures Trading Commission (CFTC) for $1.8 million due to registration failures, a decision which led to the cessation of services for US residents.

Despite these challenges, FalconX raised $150 million in mid-2022, achieving a remarkable valuation of $8 billion during its Series D financing round. This injection of capital came in the wake of the FTX collapse, during which it emerged relatively unscathed, claiming that FTX had held 18% of its unencumbered cash equivalents, leaving it in a strong position to continue its operations and expansion efforts.