The venture, EDX Markets, backed by Citadel Securities, Fidelity Investments and Charles Schwab quietly began executing trades in recent weeks, and is seeking "business from brokers and investors interested in digital assets but wary of troubles at FTX and Binance," WSJ reported.
"EDX is a “noncustodial” exchange, meaning it doesn’t directly handle its customers’ digital assets."
"Instead, EDX runs a marketplace where firms agree to execute trades of coins and dollars, using its platform to agree on prices. Then the firms move crypto and cash between each other to settle the trades."
"Later this year, EDX plans to launch a clearinghouse to facilitate the process of settling trades, but even then it plans to use third-party banks and a crypto custodian to hold customer assets."
"Unlike most crypto exchanges, EDX won’t directly serve individual investors. Instead, it expects that retail brokerages will send investors’ orders to buy and sell digital coins to its marketplace."
"EDX says it will offer trading in just four cryptocurrencies—bitcoin, ether, litecoin and bitcoin cash—none of which have been identified as securities by the SEC," stated the article.
"EDX’s other original backers include electronic-trading firm Virtu Financial and venture-capital investors Sequoia Capital and Paradigm."
"EDX’s launch and the announcement of EDX Clearing come as the company recently closed a new funding round that welcomed additional strategic investors, including Miami International Holdings, DV Crypto, GTS, GSR Markets LTD, and HRT Technology," stated the press release.
"Looking ahead, EDX Clearing will be a major differentiator for EDX -- and resolve an unmet need in the market – by enhancing competition and creating unparalleled operational efficiency through a single settlement process,” said Jamil Nazarali, CEO of EDX.