FalconX Launches Prime Connect: A Comprehensive Solution for Mitigating Exchange Counterparty Risk in Partnership with Deribit

Digital Asset prime broker FalconX has announced the release of Prime Connect, an exchange settlement solution designed to provide institutional investors with a secure trading environment on exchanges while ensuring their funds remain in bankruptcy-remote, regulated custody. In today's announcement to the press, FalconX stated, “This new offering marks a pivotal next step in the development of the cryptocurrency industry's market structure”, combining the benefits of secure exchange trading with access to FalconX's comprehensive suite of prime services, including post-trade settlement, institutional-grade credit, and portfolio margining.

Vivek Chauhan, Principal Product Manager at FalconX, highlighted the importance of Prime Connect in addressing the critical needs of institutional investors in the digital asset space, stating, "FalconX's Prime Connect caters to the critical needs of institutional investors trading in digital assets. We are pleased to launch Prime Connect with Deribit and look forward to providing our full suite of prime services which allow institutions to confidently scale their digital assets portfolios while trading on exchanges."

Traditionally, institutional investors faced challenges when trading on exchanges, as they were required to hold capital on exchanges and manage risk at an exchange level, limiting their ability to scale . FalconX's Prime Connect enables institutional traders to benefit from improved execution and stable credit lines, along with portfolio margining. This approach enhances capital efficiency and risk management without compromising asset security, as client assets remain in custody, segregated from both the exchange's and FalconX's assets.

Deribit, a leading derivatives exchange, has been selected as the first exchange to partner with FalconX for the launch of Prime Connect. Luuk Strijers, CEO of Deribit, commented on the collaboration, stating, "We are thrilled to be the first exchange that FalconX is partnering with to launch its off-exchange settlement solution. This collaboration marks a significant milestone in providing institutional investors with access to our offering coupled with FalconX's full suite of prime services that will enhance client trading capabilities and financial flexibility."

Leading institutional trading firms, such as Hyperithm, have already recognised the potential of FalconX's Prime Connect and are leveraging the platform to trade on Deribit. Jonggu Lee, Chief Investment Officer at Hyperithm, ecommented, "In the fast-paced world of crypto trading, having a reliable partner like FalconX that provides comprehensive market access along with robust credit and portfolio-margining is invaluable. The launch of FalconX's Prime Connect will mitigate counterparty risk and enhance our operational workflow. We are excited to leverage this platform to its full potential."

FalconX's Prime Connect is built on the foundation of the company's regulated custody solution, ensuring that client assets held in FalconX Custody are bankruptcy-remote. While many solutions focus solely on security, FalconX's custody is designed to seamlessly integrate with its suite of prime brokerage services, including the provision of credit.

In the coming months, Prime Connect will be available on other global exchanges, allowing exchanges integrated with the platform to tap into a network of premier institutional traders seeking the transformative benefits offered by FalconX's comprehensive solution.

FalconX is the largest digital assets prime brokerage for the world's leading institutions and the first CFTC registered cryptocurrency swap dealer. We provide the most comprehensive access to global digital asset liquidity. Our 24/7 dedicated team for account, operational and trading needs enables investors to navigate markets around the clock.

The company is backed by investors including Accel, Adams Street Partners, Altimeter Capital, American Express Ventures, B Capital, GIC, Lightspeed Venture Partners, Sapphire Ventures, Thoma Bravo, Tiger Global Management and Wellington Management. FalconXhas offices in Silicon Valley, New York, London, Hong Kong, Bengaluru, Singapore and Valletta.

Deribit is a centralized, institutional-grade crypto derivatives exchange for options and futures trading based in Panama City, Panama. Deribit's state-of-the-art infrastructure offers instantaneous price discovery, low latency trading, advanced risk mitigation services, and deep liquidity via its network of top-tier market makers. Led by a team with decades of experience in options trading across all markets, Deribit facilitates a significant majority of all crypto options trading and has robust proof of assets and liabilities procedures to ensure the exchange is held to the highest of standards.

Since its foundation in 2018, Hyperithm, operating from Japan and Korea, has been heavily involved in developing its crypto asset wealth management business for an array of institutional investors as well as others. March 2022 marked another major milestone as Hyperithm completed a Series B bridge round funding from Coinbase Ventures. In May 2022, the company began managing Japan'sfirst Bitcoin-denominated fund under the Qualified Institutional Investors Exemption Program. In June 2022, we established a Web3 ecosystem fund with the aim of revitalizing the Web3 ecosystem and have been actively investing in promising projects that seek to positively contribute to the growth of Web3.