A brand new cryptocurrency exchange, supported by companies like Citadel Securities, Fidelity Digital Assets, and Charles Schwab Corp., has recently launched. This development has the potential to significantly change the digital asset industry, especially considering the increased attention and regulation from the United States.
EDX Markets, a specialized exchange exclusively for institutional investors, will make an announcement in September 2022. The exchange will provide trading services for four prominent cryptocurrencies: Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. What sets EDX apart from established platforms like Coinbase Global Inc. and Binance Holdings Ltd. is its “non-custodial” approach. This means that EDX does not hold clients’ digital assets while trading takes place. Instead, the exchange collaborates with a trusted third-party custodian, as stated by Chief Executive Officer Jamil Nazarali.
EDX Markets (EDX), with support from Fidelity Digital Assets, Charles Schwab, and Citadel Securities, has officially launched in the United States. The company revealed on Tuesday that it has spent the last nine months developing its technology before making this significant step forward.
“I am proud to announce that EDX Markets (EDX) has successfully launched our digital asset market and completed an investment round with new equity partners,” EDX Markets CEO Jamil Nazarali wrote on LinkedIn. With the official launch of EDX, our exceptional team can now bring the same principles of competition, transparency, fairness, and security that investors in traditional assets appreciate to the world of cryptocurrency.
EDX announced the commencement of its digital asset market, accompanied by a fresh round of capital infusions. The investments come from various sources, including Miami International Holdings, DV Crypto, GTS, and other undisclosed entities, as stated by the company. This launch follows recent news of asset management leader BlackRock filing documents with the SEC to establish a spot bitcoin exchange-traded fund (ETF).
“We believe crypto is here to stay, but for it to evolve as an asset class, it needs to adopt the rules and investor protections that exist in traditional finance,” Nazarali said in an interview. “The message we’ve got from our investors is that this creates an even bigger space for us.”
In addition to its existing backers, such as Paradigm, Sequoia Capital, and Virtu Financial Inc., EDX has secured further funding from new investors, including Miami International Holdings, GTS, GSR Markets, and HRT Technology. This infusion of capital will support EDX’s future endeavors, including the launch of EDX Clearing, a platform for settling trades, scheduled for later this year.
EDX Markets stands out from other crypto exchanges because it doesn’t hold customers’ digital assets. Instead, users will need to go through financial intermediaries, similar to how trades are conducted on traditional stock exchanges like the New York Stock Exchange (NYSE) or the Nasdaq (NASDAQ). According to CEO Jamil Nazarali, regulators appreciate this approach as it ensures a clear separation between the exchange and broker-dealer functions, which they consider important.
EDX Markets has plans to introduce EDX Clearing later this year, which will facilitate the settlement of trades executed on the EDX Markets platform.
Nazarali stated in April that EDX has a small number of tokens available for trading. This is because they are waiting for clearer regulations to avoid trading assets that might be considered securities. By taking this cautious approach, regulators appreciate that EDX is avoiding the potential risks associated with such tokens.
In April, Nazarali mentioned that EDX Markets has no immediate plans for international expansion and will concentrate solely on its operations within the United States. He emphasized that the company was established with the primary goal of addressing a specific market issue within the U.S., indicating a strong focus on the domestic market for the time being
