Fidelity, Schwab, and Citadel launch new institutional crypto exchange

EDX Markets, a crypto exchange with backing from prominent financial entities, including Charles Schwab, Fidelity Digital Assets, and Citadel Securities, has officially commenced trading in four cryptocurrencies.

The launch follows EDX’s earlier plan to introduce a “non-custodial” exchange, which was announced in September, just before the FTX collapse occurred two months later.

Catering to major financial institutions

EDX, aiming to cater to the needs of major financial institutions, could address the skepticism surrounding centralized crypto service providers by operating as a “non-custodial” exchange.

In addition to its non-custodial approach, EDX plans to launch a clearinghouse business later this year, for the settlement process. However, the company will continue to store customer assets with trusted third-party banks and a crypto custodian.

The exchange has closed its second funding round, securing investments from new backers, including Miami International Holdings and affiliates of DV Trading, GTS, GSR, and Hudson River Trading, prominent proprietary trading firms.

The registration process

The launch of EDX comes just a few weeks after the SEC’s lawsuit against Binance and Coinbase for trading crypto assets that are securities and required registration.

None of the assets in question are shown on the EDX website, which is only offering spot trading exclusively for four cryptocurrencies—bitcoin, bitcoin cash, litecoin, and ethereum—and operates without registration with the U.S. Securities and Exchange Commission (SEC), according to information available on its website.

Although the SEC has not classified any digital assets that EDX supported as securities, the exchange’s lack of registration leaves it vulnerable to potential regulatory violations.

SEC chair Gary Gensler has consistently encouraged crypto firms to engage in the registration process, and the SEC has taken legal action against multiple crypto companies for violations of federal securities laws, emphasizing the importance of compliance in the crypto industry.

Also worth noting is that this release comes just a few days after BlackRock’s recent application to introduce the first-ever spot bitcoin exchange-traded fund (ETF) in the United States.