EDX Markets, Backed By Citadel Securities, Fidelity, And Schwab, Is Now Available: WSJ

Key Points:

• EDX Markets, a new cryptocurrency exchange supported by Citadel Securities, Fidelity Investments, and Charles Schwab, is looking for brokers and investors interested in digital assets.
• The exchange will use regular financial rules but will be “non-custodial.”
• Just four cryptocurrencies are supported by EDX for spot trading.

The non-custodial cryptocurrency exchange EDX Markets, supported by Citadel Securities, Fidelity Investments, and Charles Schwab, has gone online today, June 20.

Unlike other cryptocurrency exchanges, EDX said that it would operate as a “non-custodial” exchange and would not directly manage consumers’ digital assets. EDX will instead offer a platform for corporations to perform transactions between cryptocurrencies and fiat currencies.

Wall Street Journal reports that the exchange depends on retail brokerages to send investors’ cryptocurrency transaction requests to its marketplace.

According to EDX Chief Executive Jamil Nazarali, FTX’s bankruptcy has increased demand for crypto exchanges that do not have the inherent conflict of interest connected with keeping client cash. Nazarali stated:

“We are committed to bringing the best of traditional finance to cryptocurrency markets, with an infrastructure built by market experts to embed key institutional best practices. With the endorsement of our new and growing list of investors and customers, we’re proud to launch trading and look forward to further enhancements to our offering.”

EDX offers just four cryptocurrencies for spot trading: Bitcoin, Bitcoin Cash, Litecoin, and Ethereum, and it is not registered with the US Securities and Exchange Commission (SEC).

Although none of the digital assets handled by EDX have been classed as securities by the SEC, the new exchange might nonetheless run afoul of the regulatory body due to its lack of registration.

The Commission has regularly encouraged crypto businesses to come in and register under Chair Gary Gensler. The regulator has also filed many enforcement actions against cryptocurrency businesses for federal securities law breaches, emphasizing the companies’ noncompliance. According to Gensler, current securities rules appropriately control the digital asset market.

Yet, the collection of financial sector titans sponsoring the exchange demonstrates that, despite the SEC’s approach, Wall Street corporations still have a big interest in the developing market.

BlackRock, one of the world’s top asset managers, sought to develop a spot Bitcoin ETF last week. Unconfirmed allegations then surfaced that Fidelity was exploring a takeover of Grayscale or a Bitcoin spot ETF application.

The exchange, which aims to cater to brokers and investors interested in digital assets, was initially mentioned in September and will announce its formal opening today, the Wall Street Journal said.

The actual transfer of cryptocurrency and cash between parties to complete deals occurs outside of the EDX platform. Although EDX hopes to build a clearinghouse later this year to expedite transaction settlement, it expects to store client assets with third-party institutions and a crypto custodian. The non-custodial method of EDX is intended to address worries about security and possible abuse of consumer assets while eliminating conflicts of interest.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Harold

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