Institutional Powerhouse: Fidelity, Schwab, and Citadel Join Forces to Launch Revolutionary Crypto Exchange

EDX Markets, a newly launched cryptocurrency exchange, has garnered attention due to its unique approach and notable backing. Unlike traditional exchanges that primarily target retail investors, EDX focuses on institutional traders, setting itself apart in the market. One notable aspect of EDX is its non-custodial nature, which means it does not store customer funds directly. Instead, it relies on retail brokerages to route investors’ transaction orders for cryptocurrencies to its marketplace.

The exchange is supported by prominent financial institutions such as Citadel Securities, Fidelity Investments, and Charles Schwab. These backing firms, known as Wall Street giants, demonstrate a continued interest in the cryptocurrency industry despite the regulatory challenges it faces.

Jamil Nazarali, the Chief Executive of EDX, emphasized the demand for crypto exchanges that prioritize customer fund security by avoiding the conflict of interest associated with custodial storage. This demand has been further amplified by recent incidents, such as the failure of FTX, another cryptocurrency exchange.

While EDX offers trading access solely via API and lacks a front-end or graphical user interface, it provides support for spot trading activities of four major cryptocurrencies: Bitcoin, Bitcoin Cash, Litecoin, and Ethereum. Notably, the exchange is not registered with the U.S. Securities and Exchange Commission (SEC), potentially raising regulatory concerns.

Under the leadership of Chair Gary Gensler, the SEC has repeatedly urged crypto firms to register, indicating that existing securities laws are applicable to the digital assets space. The commission has taken enforcement actions against several crypto companies for violations of federal securities laws and highlighted the noncompliance of certain industry players.

Despite the regulatory landscape, Wall Street’s interest in cryptocurrencies remains unwavering. The recent application by BlackRock, one of the world’s largest asset managers, to create a spot Bitcoin ETF reflects this ongoing enthusiasm. Rumors have also circulated about Fidelity’s potential buyout of Grayscale or its own application for a Bitcoin spot ETF, indicating the continued pursuit of investment opportunities in the emerging industry.

Overall, EDX Markets’ launch marks a noteworthy development in the cryptocurrency exchange landscape. With its focus on institutional traders and reliance on retail brokerages, the exchange aims to address concerns regarding customer fund security. However, its lack of registration with the SEC may raise regulatory questions, highlighting the ongoing challenges faced by the cryptocurrency industry. Nevertheless, Wall Street’s continued interest in the sector demonstrates a sustained appetite for investment opportunities within the digital asset space.

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