Wall Street Giants Launch A New Native Crypto Exchange In The U.S.

EDX Markets, "a new digital asset marketplace designed to meet the needs of both crypto native firms and the world’s largest financial institutions", this Tuesday announced its successful launch and the completion of an investment round with new equity partners.

“I am proud to announce that EDX Markets (EDX) has successfully launched our digital asset market and completed an investment round with new equity partners. EDX’s official launch allows our outstanding team to bring to crypto the same values and standards of competition, transparency, fairness and safety that investors in traditional assets expect and enjoy,” - EDX Markets CEO Jamil Nazarali wrote on LinkedIn.

The platform's strategy is to inherit the best practices and innovations from traditional finance, including liquidity management, competitive quotes and a non-custodial model designed to mitigate conflicts of interest.

For example, EDX Markets will have a retail-only quote, filtering out market maker orders for the better convenience of individual traders.  

The novel non-custodial model means that the exchange won’t hold clients’ digital assets during trading and implies that users will have to go through financial intermediaries to buy and sell crypto assets. The exchange will only facilitate the matching of buy and sell orders, akin to the role of a traditional exchange like NASDAQ.

Regulators like this idea, Jamil Nazarali earlier said, because they think it’s important that there’s a separation between the exchange and the broker dealer function. This might be a key success factor for the exchange as its competitors are now under pressure from U.S. regulators. Some even suspect that there is a connection between the recent increase in their activity and EDX Markets launch:

EDX's entry is also notable thanks to its investors, which include Wall Street giants such as Charles Schwab, Citadel Securities and Fidelity Digital Assets. The other founders of the project include crypto-focused investors Paradigm, Sequoia Capital, and market making specialist firm Virtu Financial.

The latest funding round, which was announced together with the launch of the exchange, added Miami International Holdings, DV Crypto, GTS, GSR Markets LTD, and HRT Technology to the investor pool.

EDX aims its services squarely at institutional traders. Currently, it offers trading of four cryptocurrencies, bitcoin, bitcoin cash, litecoin and ether, and also provides access via an application programming interface (API).

Later this year, EDX plans to launch EDX Clearing to settle trades matched on EDX Markets. The clearing house will facilitate trades against a central counterparty and reduce settlement risks for participants while increasing operational efficiencies.

“EDX Clearing will be a major differentiator for EDX — and resolve an unmet need in the market – by enhancing competition and creating unparalleled operational efficiency through a single settlement process,” - said Jamil Nazarali.

We will Observe how the novel approach of EDX Markets to digital asset trading will influence the market.