Black ship approaches! Wall Street giants Citadel, Fidelity, and Jane Street support the exchange EDX, which officially launches this week.

Regulators cracking down on crypto businesses to make way for traditional financial giants to enter the market? Following strong enforcement actions by the SEC against Binance and Coinbase in the U.S., traditional financial giants have been making moves. BlackRock applies for a Bitcoin spot ETF, Deutsche Bank registers custody services, and EDX, an exchange supported by Citadel, Fidelity, and Jane Street, is set to launch this week.

Learn more about traditional financial dynamics: Wall Street plans to do it themselves as they look down on existing exchanges

Citadel, Fidelity, and Charles Schwab-backed Exchange EDX

According to The Wall Street Journal, a new cryptocurrency exchange called EDX quietly began operating in recent weeks and is planning to officially announce its launch on Tuesday. EDX is a company supported by major Wall Street firms such as Citadel Securities, Fidelity, and Schwab. Citadel Securities is the largest market maker in the United States, while Schwab and Fidelity are significant players in the brokerage industry.

EDX Differs from Crypto Exchanges: Does Not Hold User Assets

EDX differs from other cryptocurrency exchanges like Coinbase and Binance. Firstly, it offers cryptocurrencies such as Bitcoin, Ether, Litecoin, and Bitcoin Cash, avoiding the thousands of crypto tokens considered securities by the U.S. Securities and Exchange Commission (SEC). Another distinction is that EDX is a non-custodial company, meaning it does not directly handle customer funds. Instead, it functions as a marketplace where individuals can buy and sell cryptocurrencies among themselves. Similar to the stock market, investors do not enter the New York Stock Exchange or Nasdaq directly but submit orders through retail brokers like Fidelity and Charles Schwab.

Therefore, EDX does not serve individual investors but rather retail brokerage firms.

EDX CEO Jamil Nazarali stated that the failure of FTX highlighted the demand for cryptocurrency exchanges that do not hold user funds and have no conflicts of interest.

In contrast, crypto exchanges require users to store assets in their wallets, leading to risks of loss or misappropriation.

EDX: Trading, Custody, and Settlement Operate Independently

While traditional finance demonstrates a conventional securities market structure, EDX is a "non-custodial" exchange, meaning it does not directly handle customers' digital assets.

EDX solely operates a trading market where various brokerage firms execute trades with tokens and cash, with EDX responsible for matching. The brokerage firms then proceed with trade settlement.

EDX also plans to launch a clearinghouse later this year.

More about EDX: Decrypting EDX Markets! The Disruptive Weapon of the Wall Street New Trend? Is the EDX CEO a Former Citadel Employee?