EDX Markets: Crypto Exchange Launches with Major Backers

EDX Markets: Crypto Exchange Launches with Major Backers
EDX Markets (EDX), the digital asset market backed by Fidelity Digital Assets, Charles Schwab, and Citadel Securities, has officially launched in the United States after an extensive nine-month technology development phase, according to an announcement made by the company on Tuesday.

Jamil Nazarali, CEO of EDX Markets, expressed his pride in the successful launch and completion of an investment round with new equity partners in a LinkedIn post, stating that the exchange aims to bring the same values and standards of competition, transparency, fairness, and safety that investors in traditional assets expect and appreciate to the cryptocurrency space.

The establishment of EDX Markets garnered attention in September when it revealed major investments from prominent traditional finance (tradfi) firms, including Fidelity, Schwab, Paradigm, Sequoia Capital, and Citadel, the latter of which Nazarali had previously worked for.

The company has secured a new round of capital following the launch of its digital asset market, with investments from notable entities such as Miami International Holdings, DV Crypto, and GTS, among others, according to EDX Markets.

This development comes on the heels of asset management giant BlackRock filing paperwork with the U.S. Securities and Exchange Commission (SEC) last week to create a spot bitcoin exchange-traded fund (ETF).

One noteworthy aspect that sets EDX Markets apart from other crypto exchanges is its decision not to custody customers' digital assets. Instead, users will have to utilize financial intermediaries to conduct transactions involving crypto assets, similar to the process followed on traditional exchanges like the New York Stock Exchange (NYSE) or the Nasdaq (NASDAQ). Nazarali stated that regulators support this approach, as they believe it is crucial to maintain a separation between the exchange and broker-dealer functions.

Nazarali explained in an interview with CoinDesk in April that an increasing number of investors are opting to trade through trusted intermediaries, especially after the FTX controversy. Trustworthiness has become a crucial factor, leading individuals to rely on long-established firms that have withstood the test of time, providing a significant advantage to EDX Markets.

The company plans to introduce EDX Clearing later this year to facilitate settlements for trades executed on the EDX Markets platform.

Currently, EDX Markets only offers four tokens for trading: bitcoin (BTC), ethereum (ETH), litecoin (LITE), and Bitcoin Cash (BCH). This limited selection is partly due to the uncertain regulatory landscape surrounding cryptocurrencies in the United States.

"We have a limited set of tokens because until there is more regulatory clarity, we don't want to trade something that's potentially a security," commented Nazarali in April. "Regulators appreciate our cautious approach, as we prioritize avoiding unnecessary risks."

Although EDX Markets may consider expanding internationally in the future, its current focus is solely on operations within the United States, as emphasized by Nazarali in April. "Our founding purpose was to address a specific issue in the U.S. marketplace."

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