EDX Crypto Exchange Launches with Support from Citadel and Fidelity
EDX Markets has entered the cryptocurrency market with the backing of three major financial firms: Citadel Securities, Fidelity Investments, and Charles Schwab. These firms, recognized as the world’s largest market maker, the third-largest global asset manager, and a multinational services company, respectively, have supported the debut of EDX. Despite recent regulatory crackdowns and ongoing market volatility, EDX has already started executing trades and is preparing for an official launch.
Revolutionizing Cryptocurrency Exchanges with a Non-Custodial Approach
Unlike conventional exchanges, EDX operates as a “non-custodial” exchange. This means that it doesn’t directly handle customers’ digital assets. Instead, it acts as a marketplace where participating firms can agree to execute trades, facilitating direct asset transfers between entities. EDX plans to introduce a clearinghouse in the future to facilitate trade settlement, involving third-party banks and a cryptocurrency custodian responsible for safeguarding customer assets.
The non-custodial approach of EDX aims to attract cautious investors and brokers who are concerned about the risks associated with traditional crypto exchanges. The exchange will not directly serve individual investors but anticipates that retail brokerages will route orders to its marketplace for execution.
EDX Cryptocurrency Offerings
Initially, EDX will offer four major digital currencies: Bitcoin (BTC), Ether (ETH), Litecoin (LTC), and Bitcoin Cash (BCH). By focusing on these cryptocurrencies, which the SEC has not classified as securities, EDX aims to minimize potential regulatory issues. The CEO of EDX, Jamil Nazarali, brings significant experience to the role, having held executive positions at Citadel Securities.
As EDX enters the cryptocurrency market, its non-custodial model, strategic partnerships, and focused cryptocurrency selection position it as an intriguing player. However, its success will depend on navigating regulatory challenges and addressing concerns raised by the crypto community.
Controversy Surrounding EDX’s Launch
EDX’s launch comes at a challenging time for the cryptocurrency market, with regulatory actions by the SEC resulting in lawsuits against major companies like Coinbase and Binance. Some members of the crypto community have criticized EDX for excluding certain cryptocurrencies from its offerings, claiming that the exchange aligns itself with an inner circle and omits securities recently categorized by the SEC.
Furthermore, the timing of EDX’s launch has drawn criticism, as it coincides with the SEC’s charges against prominent cryptocurrency exchanges. Speculation surrounding Fidelity’s application for a bitcoin ETF also raises questions about the timing of EDX’s launch, considering Fidelity’s prominent role as a major backer of the exchange.
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