EDX Exchange, backed by Citadel Securities, Fidelity, and Charles Schwab, has launched.
EDX Markets is a new cryptocurrency exchange that has entered the market with the backing of Citadel Securities, Fidelity Investments, and Charles Schwab. The exchange aims to attract brokers and investors interested in digital assets. It operates in a noncustodial capacity, meaning it does not directly handle customers’ digital assets. Instead, it serves as a marketplace where firms can execute trades. This eliminates the risk of bank-run style failings that the industry witnessed in 2022 with FTX, Celsius, and others. The exchange has yet to announce its official launch.
The development comes at a time when American exchange Coinbase and worldwide exchange Binance are facing lawsuits from the U.S. Securities and Exchange Commission. While the crackdown indicates increasing scrutiny from regulators, larger institutions are viewing this as an opportunity to swoop in for market share. These firms often have close ties to regulators and are much more effective at complying with regulations as a result of their scale, and as such, the current environment is seemingly ripe for disruption.
BlackRock, the world’s largest asset management firm with more than $8 trillion under management, recently filed for a spot Bitcoin ETF. This indicates that these institutions see the current environment as an opportunity for expansion into the sector. SEC Chairman Gary Gensler has repeatedly claimed that bitcoin is not a security but a commodity, effectively keeping it out of the realm of SEC regulation. As a result, institutions like BlackRock may perceive bitcoin to be the safest cryptocurrency to offer products for, although this newly announced EDX exchange will feature other cryptocurrencies as well.
Overall, the development indicates that BlackRock is not the only major traditional finance institution paying attention to bitcoin. Everyone wants their slice of the pie, and regulators have served up that pie fresh out of the oven.
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