Arbelos Markets, a crypto principal trading firm co-founded by digital asset derivatives veterans Joshua Lim and Shiliang Tang, announced on Wednesday that it successfully raised $28 million in an investment round that was “significantly oversubscribed.”
The fundraising round comprised seed equity and debt financing, with Dragonfly Capital leading the investment. A diverse group of investors participated in the round, including investment firms Room40 Ventures, Selini Capital, and Breed VC, as well as corporate partners such as FalconX, Circle Ventures, Paxos, P2 Ventures (formerly Polygon Ventures), Deribit, Chorus One, StarkWare, and Immutable. Additionally, angel investors from Aevo, Cega, Talos, Amberdata, and Framework contributed to the funding.
The investment comes at a time when the digital asset industry is recovering from the crypto credit meltdown of 2022, which affected several companies like BlockFi, Celsius, and Three Arrows Capital. As the industry matures, more sophisticated and traditional players are entering the space, shifting it away from its retail-driven origins and making it more akin to traditional financial markets.
Arbelos Markets, based in the British Virgin Islands, aims to address the gap left by the previous market turmoil by catering to the liquidity and hedging needs of sophisticated investors using crypto derivatives and options. According to Joshua Lim, the lack of transparency was a significant factor in the crypto credit crisis, with some firms presenting outdated or fabricated financial reports, obscuring the true risks from creditors.
To combat this issue, Arbelos has developed a “transparency engine” that allows clients to independently verify the firm’s risk profile, balance sheet, and counterparty exposure in real time. Lim emphasized that preventing a recurrence of the previous cycle’s problems was a central focus for Arbelos.
Since its establishment in late 2023, Arbelos has become one of the largest options block liquidity providers, with its derivatives trading volume surpassing $25 billion in notional value during the first six months. The company plans to utilize the funds raised to expand its team, access new markets, and offer more structured products to its clients.
