FalconX Eyes Miami for Expansion as CEO Plans Hiring Push

The institutional crypto exchange plans to grow to about 160 employees from 90 and is considering acquisitions.

Sep 27, 2021 at 5:26 p.m. UTC
Updated Sep 27, 2021 at 6:43 p.m. UTC

FalconX expects to grow to roughly 160 employees from 90 over the next six months, CEO Raghu Yarlagadda said.

He also said the institutional crypto exchange is evaluating Miami as a potential location for expansion after several firms have opened offices in the crypto-friendly city in recent months.

FalconX is trying to tap the growing demand from institutional investors trading cryptocurrencies as larger competitors such as Coinbase do the same. On its last earnings call, Coinbase said that institutions accounted for 69% of its $462 billion in second-quarter trading volume.

While FalconX is looking at mainly internal growth, it’s also considering acquisitions, Yarlagadda said in an interview with CoinDesk.

The exchange is looking at potential deals to add talent and is also considering strategic purchases that will help the company become more of a “one-stop shop” in crypto for institutional investors.

He said that pension funds are starting to dip their toes into cryptocurrency through hedge funds.

“Instead of getting direct exposure to crypto, like parking some money in bitcoin, they’re getting indirect exposure to the hedge funds that typically deploy money,” Yarlagadda said.

SkyBridge Capital founder Anthony Scaramucci told Bloomberg last week that the majority of institutional investors are still reluctant to invest in crypto and blockchain technology, but that may be changing, according to Yarlagadda, who recently met with six of the top 10 hedge funds in the world.

Hedge funds are allocating about 1% of their assets under management toward crypto, Yarlagadda said. The hedge funds he met with said they are looking to increase that figure to 8% to 9%., while asset managers want to get to about 5% over the next 12 to 18 months, he added.

“That’s why we are hiring as fast as we can,” he said.

Last month, FalconX reached unicorn status (startups worth at least $1 billion) with a $210 million Series C funding round led in part by Tiger Global that valued the firm at $3.75 billion.

FalconX’s previous funding round, announced in March, valued the company at $675 million.

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Josh Fineman is CoinDesk's Senior Wall Street Reporter, covering the intersection of crypto and traditional finance.