Today EDX Markets was unveiled as a new cryptocurrency and digital asset exchange backed by broker-dealers, market makers and venture capital firms. While it is an independent entity, the investors include Charles Schwab, Citadel Securities, Fidelity Digital Assets℠, Paradigm, Sequoia Capital and Virtu Financial. The technology infrastructure comes from MEMX.
The key differentiator is that users will be able to access cryptocurrencies through their traditional broker-dealer rather than having to have a crypto exchange account.
The new exchange says it will address conflicts of interest seen in today’s crypto exchanges by separating the exchange from the traders and using a network of custodians. That’s something the SEC Chair Gary Gensler has recently been emphasizing. EDXM also plans to net trades and settle on the blockchain rather than using bilateral settlement.
“Crypto is a $1 trillion global asset class with over 300 million participants and pent-up demand from millions more. Unlocking this demand requires a platform that can meet the needs of both retail traders and institutional investors with high compliance and security standards,” said the EDXM board of directors in a statement.
They added, “With MEMX-supported digital infrastructure that eliminates technological and organizational bottlenecks, EDXM will be a safe entry point to crypto and serve as the exchange of choice for trading digital assets on a platform designed for and used by leading financial institutions.”
The company has made key appointments that include CEO Jamil Nazarali from Citadel Securities, which initiated the consortium. The CTO is Tony Acuña-Rohter, who had the same role at CBOE’s ErisX, and the General Counsel is David Forman, former General Counsel at Fidelity Digital Assets as well as Chief Legal Officer for Fidelity Digital Brokerage.