A new cryptocurrency exchange backed by finance giants Charles Schwab, Fidelity, Digital Assets and Citadel Securities has officially launched trading in four assets, including Bitcoin and Litecoin, the company said on Tuesday.
EDX Markets first announced its plans for a ‘non-custodial’ exchange in September, two months prior to FTX’s fraud-induced collapse. Paradigm, Sequoia Capital and Virtu Financial are among the other early backers.
The revelation comes just days after BlackRock filed an application to launch the first spot bitcoin exchange-traded fund in the United States, confirming that, despite the crypto industry’s black eye from FTX and other bad actors in 2022, and the chill from US regulators this year, long-term institutional interest has not waned.
The exchange caters for Bitcoin, Litecoin, Ether and Bitcoin cash trading, none of which were named “crypto asset securities” in lawsuits the Securities and Exchange Commission brought against Binance and Coinbase two weeks ago.
Notably, Litecoin has witnessed numerous tailwinds in terms of network strength (hashrate), adoption and network growth in 2022-2023. Due to its long-standing history, the crypto is among a handful of assets that has attained ‘digital commodity’ status besides bitcoin. The bearer asset was made available for purchase in Hong Kong in early June.
Per its stated goals, EDX strives to “meet the needs of the world’s largest and most sophisticated financial institutions”, many of which remain sceptical of centralised crypto services providers due to a string of failures in 2022 and regulatory uncertainty large players find themselves in.
EDX exchange operates as a “non-custodial” exchange in an attempt to quell potential misuse of funds. This means that instead of directly handling customer assets, it will act as an execution network for orders and settling trades between crypto assets and fiat currencies.
EDX also plans to launch a clearinghouse business this year to facilitate the settlement processes. It will keep customer assets held at third-party banks and a crypto custodian.
The company recently launched a second investment round with new investors, including Miami International Holdings, an options exchange operator, and affiliates of proprietary trading firms DV Trading, GTS, GSR, and Hudson River Trading.
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