FalconX Ltd., a startup that provides crypto investment tools, today announced plans to acquire fellow digital asset company 21Shares AG.

The terms of the deal were not disclosed. According to the Wall Street Journal, FalconX will finance the transaction with a combination of cash and stock.

San Mateo, California-based FalconX received a $8 billion valuation after its most recent funding round. The company operates as a crypto prime broker, which means it provides tools and financing that institutional investors can use to trade in digital assets. FalconX claims to have facilitated more than $2 trillion worth of crypto transactions since launch.

The company provides a software platform that enables investors to make trades on multiple crypto exchanges, as well as move their assets between those exchanges. Users can draw down credit from FalconX to finance trades. The company promises to provide a more convenient fundraising process than rivals and enables institutional investors to use their crypto assets as loan collateral.

FalconX also operates a custody service in which customers can keep their digital assets. The service uses a technology called multi-party computation, or MPC, that requires sensitive transactions to be approved by multiple parties. Hacking one of the parties isn’t enough for cybercriminals to gain access to a user’s crypto assets, which reduces the risk of breaches.

21Shares operates investment vehicles called crypto ETPs. Those are publicly traded funds that hold digital assets. Investors can buy and sell shares of ETPs just like regular stock, which provides a relatively simple way to gain exposure to the crypto sector.

FalconX detailed today that 21Shares operates the industry’s largest portfolio of cryptocurrency-backed ETPs. The Swiss company is credited with launching Europe’s first Bitcoin ETP. Two years ago, it partnered with prominent tech investor ARK Invest to jointly launch five publicly traded funds. One of those funds tracks Bitcoin futures, which are contracts that require their holder to purchase Bitcoin at a predetermined future date for a predetermined sum.

Since launching in 2018, 21Shares has created 55 ETPs with more than $11 billion in assets under management. The company’s funds track not only Bitcoin futures but also ether futures and other assets.

According to the Journal, FalconX expects the acquisition to accelerate the pace at which it develops new products. It plans to launch funds that hold crypto derivatives. Additionally, FalconX co-founder and Chief Executive Officer Raghu Yarlagadda told the paper that the company is considering a public listing. 

The acquisition is the latest in a series of high-profile crypto buyouts announced over the past three months. Previously, Ripple Labs Inc. spent $1.2 billion to purchase Rail and GSTreasury, which provide crypto payment processing and corporate treasury management software, respectively. On Tuesday, Coinbase Holdings Inc. acquired crypto-based startup fundraising platform Echo for $375 million.

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