EDX Markets, a non-custodial cryptocurrency exchange backed by Citadel Securities, Fidelity Investments, and Charles Schwab, is live as of today, June 20.
EDX differentiates itself from traditional crypto exchanges by not directly catering to retail investors as it focuses on institutional traders. Additionally, trading access is via API and does not offer a front-end or trading graphical user interface.
WSJ reported that it relies on retail brokerages to route investors’ transaction orders for cryptocurrencies to its marketplace.
EDX Chief Executive Jamil Nazarali reportedly said FTX’s failure had heightened demand for crypto exchanges that do not possess the inherent conflict of interest associated with storing customer funds.
EDX is not registered with the SEC, lists only four crypto assets
According to its website, EDX supports spot trading activities for only four cryptocurrencies— Bitcoin, Bitcoin Cash, Litecoin, and Ethereum—and is not registered with the U.S. Securities and Exchange Commission (SEC).
While none of EDX’s supported digital assets have been classified as securities by SEC, the new exchange could still run afoul of the regulatory authority with its lack of registration.
Under Chair Gary Gensler, the Commission has repeatedly advised crypto firms to “come in and register.” The regulator has also filed several enforcement charges against crypto firms for federal securities law violations and highlighted the noncompliance of crypto companies.
Gensler has maintained that existing securities laws adequately govern the digital assets space.
Wall Street firms remain interested in crypto
Meanwhile, the group of financial industry giants backing the exchange shows that Wall Street firms still have a massive appetite for the emerging industry despite the U.S. SEC’s approach.
Last week, BlackRock, one of the world’s largest asset managers, applied to create a spot Bitcoin ETF. Unconfirmed rumors later emerged that Fidelity was considering a buyout of Grayscale or an application for a Bitcoin spot ETF.
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