FalconX buys Arbelos Markets, MicroStrategy’s 21/21 plan, BlackRock’s IBIT bleeds $332m | Weekly Recap

Today’s edition of the weekly recap includes top headlines from FalconX, MicroStrategy, Coinbase and Binance. We also look at the record outflows of BlackRock’s Bitcoin ETF plus regulatory updates from China and other trending news items.

FalconX, Arbelos take crypto derivatives to another level

• FalconX, a digital asset prime broker, acquired Arbelos Markets, a New York-based derivatives trading firm led by industry veterans Joshua Lim, Shiliang Tang, and Sergio Almada Monter.
• The purchase price wasn’t revealed. Arbelos Markets raised a substantial $28 million in funding back in May. FalconX backed Arbelos at the time.
• FalconX CEO Raghu Yarlagadda and Arbelos CEO Joshua Lim both emphasized the shared mission to enhance market liquidity and expand crypto’s role in cross-asset portfolios. The partnership marks a pivotal moment for the crypto derivatives market as it evolves to mirror traditional asset classes.

MicroStrategy targets $42 billion in funds

• MicroStrategy intends to raise $2 billion through preferred stock offerings as part of its 21/21 Plan. The company is targeting $42 billion in fundraising over three years.
• Shares in the Tysons Corner, Virginia-based company dropped by 21% in December, while Bitcoin (BTC) is down by less than 2%. This marks a significant divergence (MicroStrategy stock typically moves in tandem with Bitcoin).
• MicroStrategy shares spiked over 320% in 2024, while Bitcoin jumped by 120%. Some investors now view it as a better alternative to BTC and spot Bitcoin ETFs.

Coinbase looks to Europe

• Coinbase, the U.S.-based cryptocurrency exchange, has acquired the Cyprus unit of BUX, rebranding it as Coinbase Financial Services Europe. The acquisition grants Coinbase a Cyprus Investment Firm license under the Cyprus Securities and Exchange Commission, enabling it to offer contracts for differences (CFDs) in Europe. CFDs allow traders to speculate on asset price movements without owning the underlying assets, catering to professional and institutional clients.
• With its new license, Coinbase is positioning itself to compete in global markets, with some analysts predicting it could surpass Charles Schwab, the $7 trillion asset manager, as the world’s most valuable brokerage.

China’s new rules, South Korea considers crypto ETFs

• China has introduced new rules requiring banks to monitor and flag risky transactions, including those involving cryptocurrencies, making it more difficult for mainland investors to trade digital assets. The regulations focus on identifying “risky foreign exchange trading behaviors,” such as underground banking, cross-border crypto transactions, and other illegal financial activities. These measures aim to curb unauthorized financial practices and strengthen oversight of digital asset trading.
• South Korea Exchange Chairman Jeong Eun-bo revealed plans to evaluate crypto spot ETF approval in 2025, while the FSC considers permitting security token offerings.

Binance bags another approval

• Binance received full regulatory approval from the Banco Central do Brasil to acquire Sim;paul, a licensed broker-dealer. This shows its strategic expansion in Latin America’s largest market.
• Binance also announced a temporary pause of Dash (DASH) token deposits and withdrawals on Jan. 7 to accommodate a network upgrade and hard fork scheduled at block height 2,201,472.

DeFi and market performance

• BIO Protocol secured $64.41 million through a public sale.
• The overall crypto market cap reached $3.5 trillion, up from $3.42 trillion last week, marking continued market strength. However, NFT sales declined 17.54% to $132.7 million, according to CryptoSlam data.
• December 2024 recorded over 25 crypto hacks, resulting in losses totaling $24.7 million. This is a 71% decrease from November’s figures, according to blockchain security firm PeckShield’s latest report.

Inflows, outflows

• BlackRock’s iShares Bitcoin Trust (IBIT) experienced its largest-ever single-day outflow on January 2, with $332.62 million withdrawn, contributing to a three-day streak of outflows totaling $392.6 million. The decline came as U.S. trading resumed after the New Year, and Bitcoin ETFs collectively saw $242.3 million in withdrawals, according to SoSoValue data.
• While BlackRock’s Bitcoin ETF faced withdrawals, other crypto funds gained traction. Bitwise’s BITB, Fidelity’s FBTC, and Ark 21Shares’s ARKB recorded inflows of $48.31 million, $36.2 million, and $16.54 million, respectively, reflecting continued investor interest in Bitcoin-related products despite the short-term outflow trend.
• The Floki (FLOKI) DAO approved a significant proposal to allocate a portion of its token supply as liquidity funding for a Floki exchange-traded product.

Legal matters

• Former Terraform Labs co-founder Do Kwon entered a not guilty plea to criminal fraud charges in Manhattan federal court on Jan. 2, following his recent extradition from Montenegro.
• Defunct crypto lender Celsius Network filed an appeal challenging a U.S. court ruling that dismissed its $444 million claim for damages against FTX. Judge John Dorsey previously rejected Celsius’ claims, stating the firm’s initial proof of claim, which briefly mentioned investigating preference claims, failed to meet the Bankruptcy Code’s requirements. Celsius had reduced its original $2 billion claim to $444 million, but the amendment was deemed untimely and unrelated to the original filing.
• Meanwhile, former Celsius CEO Alex Mashinsky faces multiple fraud charges, including wire fraud and market manipulation, related to Celsius’ collapse. If convicted, Mashinsky could face up to 115 years in prison.

For the previous edition of the weekly recap, click here.