Digital asset exchange EDX announced that it selected Anchorage Digital as its digital asset custody partner. EDX Markets was co-founded last year by a group of institutions including Citadel Securities, Fidelity Digital Assets, Schwab, Paradigm, Sequoia Capital and Virtu Financial.
It launched cryptocurrency trading in June, targeting brokers and other institutions, emphasizing that it is a non custodial offering. Later this year it intends to launch EDX Clearing, providing a central counterparty for settlement, and Anchorage will provide custody to the clearing arm.
“Anchorage Digital has a robust security, governance, risk and compliance framework, which will provide a best-in-class solution to meet the needs of our institutional client base,” said Jamil Nazarali, CEO of EDX. “As the only federally chartered crypto bank in the US, Anchorage Digital Bank is the ideal partner to support EDX’s build of a robust and compliant clearinghouse business.”
Last October, EDX announced a different provider, Paxos as its custody partner. Paxos is a New York licensed custodian (and the issuer of the PayPal stablecoin). It also had a conditional bank trust charter from the Office of the Comptroller of the Currency, but this has now lapsed.
Anchorage managed to get its national charter just before the end of the Trump administration. In fact, it was awarded the day before Brian Brooks departed as Acting Comptroller. As noted by Bloomberg, under the Biden administration not a single fintech has received national charters, whether crypto banks or otherwise.
Meanwhile, Anchorage Digital has raised almost a half a billion dollars in venture funding. In late 2021 KKR led its $350 million Series D round at a $3 billion valuation. Other participants included Goldman Sachs, Andreessen Horowitz and PayPal Ventures. One of its first high profile backers was Visa which invested in a $40 million Series B round in 2019.
“Anchorage Digital has proven that separating custody and exchange functions for institutions isn’t just possible, it’s essential,” added Diogo Mónica, Co-Founder and President of Anchorage Digital.