Opened EDX Markets
EDX Markets, a new crypto asset (virtual currency) exchange exclusively for institutional investors backed by major financial institutions, launched its services on the 21st.
EDX Markets offers four types of cryptocurrency trading: Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and Bitcoin Cash (BCH).
Traditional financial institutions named as backers of EDX Markets include Citadel Securities, Fidelity Investments, and Charles Schwab. Meanwhile, venture capital firms in the cryptocurrency industry have also invested in Paradigm, Sequoia Capital, and Virtu Financial.
EDX Markets was established in New Jersey, USA last September. One of its characteristics is that it is a “non-custodial” type. In other words, it is a style that does not directly store the customer’s virtual currency. This will reduce security risks and misuse of customer funds, and effectively eliminate concerns about conflicts of interest. EDX stresses its policy to apply the rules adopted by traditional securities markets.
The SEC (U.S. Securities and Exchange Commission) filed a lawsuit against major cryptocurrency exchanges Binance and Coinbase in early June. They allege that they offer unregistered securities, and that they are not registered with the SEC as brokers, stock exchanges, or clearing institutions, and that they evade securities market disclosure regimes.
SEC Chairman Gary Gensler has warned that existing cryptocurrency trading platforms encompass business areas such as custody, market making and trading, creating conflicts of interest.
connection:Binance and Coinbase SEC Lawsuit |
Trends in traditional financial institutions
When customers trade between cryptocurrencies and fiat currencies on the EDX platform, the actual transfer of assets takes place off-platform. For custody of client assets, EDX partners with third party banks and custodian services.
EDX does not provide services directly to individual investors, but since it provides a “place” similar to the stock market, general investors will be able to use it through their securities company accounts. This is expected to improve the efficiency of investor transactions and maintain fairness.
The company also plans to set up a clearinghouse later this year to streamline the settlement process for trades matched on the EDX market. Clearinghouses collect and manage transaction data, enable batch settlement of multiple transactions, and facilitate transaction monitoring and regulatory compliance. This allows efficient and reliable transaction processing.
EDX recently closed its second round of funding, joining new investors including Miami International Holdings, proprietary trading firm DV Trading, GTS, GSR and affiliates of Hudson River Trading.
More and more traditional financial institutions are entering the cryptocurrency market. BlackRock, the world’s largest asset management company, filed an application with the SEC on June 15 with the aim of launching a Bitcoin spot-type ETF (exchange-traded fund).
connection:BlackRock Submits Bitcoin ETF
Deutsche Bank AG, a global megabank, announced on the 20th that it has applied for regulatory approval to operate a custody service for digital assets such as cryptocurrencies.
connection:Deutsche Bank applies for license for cryptocurrency custody service