Schwab and Fidelity-Supported Cryptocurrency Trading Platform EDX Launches, Attracts New Supporters

EDX Markets, a digital asset exchange supported by Charles Schwab (SCHW), Fidelity, and Ken Griffin's Citadel Securities, inaugurated transactions for bitcoin (BTC), ether (ETH), litecoin (LTC), and bitcoin cash (BCH).

Key TakeAway

• Schwab and Fidelity-supported digital asset platform EDX Markets commenced trading for bitcoin, ether, litecoin, and bitcoin cash.
• EDX operates as a 'decentralized' exchange, signifying it does not retain customer crypto and instead employs a third-party guardian.
• EDX intends to unveil a settlement hub in the upcoming months to facilitate trade finalization for its clients.
• EDX further revealed its latest stakeholders, encompassing Miami International Holdings, DV Crypto, GTS, GSR Markets LTD, and HRT Technology.

What Sets the EDX Platform Apart?

The EDX platform distinguishes itself by sidestepping the "cryptocurrency security assets" that have been the focus of recent legal actions initiated by the SEC against Binance and Coinbase (COIN). By positioning itself as a "decentralized" exchange, EDX aims to meet the demands of prominent financial institutions that desire cryptocurrency exposure but have concerns regarding centralized crypto service providers.

An off-custodial platform implies that it refrains from retaining its clients' crypto-tokens, instead guaranteeing that customer assets will be securely stored at third-party financial institutions serving as a crypto custodian. This approach alleviates apprehensions surrounding possible misappropriation of funds.

Take, for instance, Coinbase, which assumes the role of a custodian for its customers' cryptocurrencies, unless they choose to utilize a self-custody Coinbase wallet.

While it may be convenient to commence crypto trading with an exchange that safeguards your tokens, potential risks encompass the loss of assets in the event of exchange hacking or diminished profits due to custodial fees.

The exchange operates as a platform that connects a network of enterprises for executing and finalizing transactions involving cryptocurrency assets and fiat currencies. However, it presently lacks the capability to facilitate trade settlements. EDX aims to address this by launching a clearinghouse venture later this year, which will empower it to carry out settlements.

The inauguration of the exchange arrives shortly after BlackRock's submission for the initial spot bitcoin exchange-traded fund (ETF) in the United States, indicating continued institutional interest in the long-term prospects of the crypto market despite recent industry setbacks and regulatory concerns.

EDX has also concluded a subsequent funding round, attracting fresh investors such as Miami International Holdings and affiliates of exclusive trading firms DV Trading, GTS, GSR, and Hudson River Trading.