A new crypto exchange backed by several Wall Street heavyweights such as Charles Schwab SCHW, , Citadel Securities, Fidelity Digital Assets, Paradigm, Sequoia Capital, and Virtu Financial, has started operation.
The exchange, called EDX Markets, was launched in September. It currently allows trading of bitcoin BTCUSD, , ether ETHUSD, , Litecoin LTCUSD, and Bitcoin Cash BCHUSD, , according to a statement Tuesday.
EDX is a “noncustodial” exchange, meaning it doesn’t directly handle its customers’ digital assets, the Wall Street Journal reported. Instead, EDX runs a marketplace where firms agree to execute trades of coins and dollars, using its platform to agree on prices. Then the firms move crypto and cash between each other to settle the trades. Later this year, EDX plans to launch a clearinghouse to facilitate the process of settling trades, but even then it plans to use third-party banks and a crypto custodian to hold customer assets.
In contrast, crypto exchanges typically require their customers to park their digital coins in wallets run by the exchange, creating the risk that the exchange could lose the funds or be tempted to misuse them.
The move comes after the Securities and Exchange Commission recently sued both crypto exchanges Binance and Coinbase COIN, .
SEC chairman Gary Gensler has repeatedly said most crypto are securities and should fall into the agency’s jurisdiction, while bitcoin is the only crypto he is comfortable labelling as a commodity.
EDX will also launch a clearing house to settle trades later this year, the company said.
The company has recently closed a new funding round, where the investors include Miami International Holdings, DV Crypto, GTS, GSR Markets LTD, and HRT Technology.
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New crypto exchange EDX backed by Citadel Securities, Fidelity, Schwab starts operation - MarketWatch
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