(Reuters) -FalconX said on Wednesday it will buy crypto investment management firm 21shares, as the digital assets trading firm looks to expand its exchange-traded funds offerings.
The deal comes just over a month after Wall Street's top regulator removed the last remaining hurdle to dozens of new spot ETFs tied to cryptocurrencies ranging from solana to dogecoin.
The terms of the deal were not disclosed.
The Trump administration has aligned itself with the digital assets sector via long-awaited regulatory
clarity, marking a stark turnaround from the years of struggle and a legal battle that paved the way for the approval of the first bitcoin ETF in January 2024.
"We're witnessing a powerful convergence between digital assets and traditional financial markets, as crypto ETPs (exchange-traded products) open new channels for investor participation through regulated, familiar structures," said FalconX CEO Raghu Yarlagadda.
Founded in 2018 by Hany Rashwan and Ophelia Snyder, 21shares now manages over $11 billion in assets across dozens of products.
FalconX plans to leverage 21shares' expertise in crypto ETFs and its brokerage platform to advance the adoption of digital asset investment products.
Although updated standards from the Securities and Exchange Commission are expected to unleash a flurry of crypto ETFs, the U.S. government shutdown could curb the agency's ability to review and approve these filings.
Concerns are also mounting over highly leveraged funds tracking crypto and related companies. Earlier this month, the sector saw its largest selloff ever after U.S. President Donald Trump renewed trade tensions with China.
FalconX, which was valued at $8 billion in a 2022 funding round, has facilitated over $2 trillion in trading volume and has a client base exceeding 2,000 institutions.
(Reporting by Ateev Bhandari and Arasu Kannagi Basil in Bengaluru; Editing by Sahal Muhammed)
