EDX Markets, a trading platform supported by Wall Street, has arrived! It is designed for institutional use and operates on a non-custodial model.

EDX Markets is a new trading platform supported by Wall Street for institutional use. It uses a non-custodial model.

Edited by: Felix, BlockingNews

The Wall Street Journal reported on June 20 that EDX Markets (EDXM), a new cryptocurrency exchange supported by Wall Street giants such as Citadel Securities, Fidelity Investments, and Charles Schwab, has begun executing trades in recent weeks. The exchange has officially launched its trading services, offering four cryptocurrencies, including Bitcoin, Ethereum, Litecoin, and Bitcoin Cash (assets that have not been recognized by the US Securities and Exchange Commission as securities).

Additionally, EDX Markets announced the completion of a new round of financing, with investors including Miami International Holdings, DV Crypto, GTS, GSR Markets LTD, and HRT Technology, Charles Schwab, Citadel Securities, Fidelity Digital Assets SM, Blockingradigm, Sequoia Capital, and Virtu Financial. The new funds will support EDX’s continued development of its trading platform.

In fact, EDX Markets is an institutional-only exchange that does not directly handle clients’ digital assets or serve individual investors. It first appeared in September of last year. Unlike existing cryptocurrency trading platforms such as Binance and Coinbase, EDX Markets borrows from traditional financial standards. Similar to trading stocks and options, EDX Markets will allow investors to buy and sell digital assets through existing brokerage firms rather than through external venues or directly through native cryptocurrency exchanges. EDX Markets will operate as a “non-custodial” exchange, not holding clients’ digital assets during the trading period. It will offer API-based trading access rather than traditional front-end user interfaces. The non-custodial approach aims to alleviate concerns about security and potential misuse of client funds and avoid conflicts of interest.

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Instead, EDX Markets will provide a platform where institutions can execute trades between cryptocurrencies and fiat currencies. EDX Markets CEO Jamil Nazarali said EDX is working with third-party custodians. It plans to use third-party banks and cryptocurrency custodians to hold client assets. And it will launch EDX Clearing later this year to settle trades matched on EDX Markets. This move could reshape the landscape of digital assets in the US as scrutiny of the industry is increased.

Nazarali said, “We’re taking some of the best features of traditional finance and bringing them into the digital market to increase efficiency and save investors costs.”

As for the team, EDX Markets CEO Jamil Nazarali was formerly global head of business development at Citadel Securities. David Forman was formerly chief legal officer at Fidelity Brokerage Services and is now general counsel for EDX. The exchange’s chief technology officer, Tony Acuña-Rohter, was formerly chief technology officer at ErisX, which is now part of Cboe Global Markets, the Chicago-based options exchange.

EDX Markets’ technical development is provided by MEMX, which is reportedly a securities exchange that is the youngest in the United States, founded by mainstream Wall Street banks, electronic trading companies, and asset management giants.

Nazarali said that EDX’s system will be located in a data center in Secaucus, New Jersey, and that the software used will ensure that trades are processed in the order in which they are submitted. Nazarali said that this type of order processing and management is different from how most cryptocurrency exchanges operate.

Regarding the number of tokens to be launched, Nazarali said, “Our token quantity is limited because we don’t want to trade anything that may be a security before regulations are clearer.”

As the United States SEC sues Binance and Coinbase and lists many tokens such as SOL as securities, the endorsement and high-profile entry of traditional Wall Street giants into the EDX Markets exchange is worth watching for regulatory signals, and whether the cryptocurrency industry is moving towards traditional fields.

References:

https://www.businesswire.com/news/home/20230620110605/en/Digital-Asset-Platform-EDX-Markets-Begins-Trading-and-Completes-New-Funding-Round

https://www.theblock.co/post/235607/charles-schwab-citadel-backed-crypto-exchange-goes-live-today-wsj

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