Digital asset trading may experience a seismic shift with the entry of a new player. The new trading exchange, EDX Markets, is backed by big Wall Street firms such as Charles Schwab, Citadel Securities and Fidelity Digital Assets.
Amid regulatory turmoil, Wall Street's interest in cryptocurrencies apparently remains undiminished. EDX Markets is a digital asset marketplace offering spot trading in Bitcoin (BTC), Ether (ETH), Litecoin (LTC), and Bitcoin Cash (BCH). It said the platform was developed to meet the latent demand for trading digital assets and provide a secure, compliant and liquid trading environment. EDX's unique model without a custodian is intended to mitigate conflicts of interest that are currently a point of contention in the traditional financial industry. The company has quietly begun executing transactions in recent weeks.
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EDX Markets: an OTC crypto trading venue
The EDX Markets trading venue differs from other exchanges in its "non-custodial" approach. In other words, the platform does not directly custody the assets of its clients. Instead, EDX serves as a platform where participating firms can agree on the pricing and execution of trades. Once prices are agreed upon, the two parties transfer funds between each other to complete the transactions.
EDX plans to further enhance this process later this year by introducing a clearinghouse. This would streamline the process of settling trades. But even then, EDX would continue to use third-party banks and a digital asset custodian to protect customers' assets. This approach is quite different from typical crypto exchanges. Most trading venues require customers to store their digital assets in wallets controlled by the exchange. This arrangement poses risks related to the potential loss or misuse of funds by the exchange.
Wall Street Undeterred by Regulatory Pressure
The tightening regulatory environment for crypto companies in the United States has been making headlines for several months. Led by the Securities and Exchange Commission (SEC), US authorities are actively targeting companies. Apparently, no problem for the Wall Street giants. Among the notable supporters of EDX Markets are Charles Schwab, Citadel Securities, Fidelity, and many more. But other Wall Street giants such as BlackRock are also making further inroads. Was the attack on the industry just political theater?
There it is.
Crypto Exchange EDX Markets Backed by Citadel Securities, Fidelity, Schwab Starts Operations
— Hsaka (@HsakaTrades) June 20, 2023