With the news that the two major cryptocurrency exchanges, Binance and Coinbase, were caught by the SEC, many people speculated: Is the SEC trying to clear obstacles and pave the way for Wall Street’s own crypto trading platform?
Why is EDX Markets favored by Wall Street?
According to the official description, EDX Markets aims to "enable secure and compliant digital asset transactions through trusted intermediaries"
Unlike traditional Crypto exchanges like#Binanceand #Coinbase, EDX Markets adopts a non-custodial model and does not hold customers' digital assets during transactions. Instead, it cooperates with third-party custodians to reduce custody risks. EDX Markets mainly conducts order matching, similar to traditional stock exchanges.
Secondly, EDX Markets is an institutional trading platform that avoids serving retail investors directly, and they provide API-based trading access rather than a traditional front-end user interface.
Previously, SEC Chairman Gary Gensler instructed that cryptocurrency exchanges, like traditional assets, must comply with securities laws. He also pointed out that cryptocurrency exchanges combine multiple functions. In the traditional financial field, the New York Stock Exchange does not make markets like hedge funds. The implication is that the SEC does not agree that existing exchanges combine trading, market making, and custody.
EDX Markets aims to solve the problems criticized by regulators, stripping away market making and custody functions, turning into a pure trading platform, and eventually becoming a "national exchange" similar to NASDAQ or NYSE.
At this point, the future development path of EDX Markets seems to become clear: to provide a highly transparent market, meet regulatory compliance requirements and only do non-custodial transaction matching to serve institutional investors.
What is the investment (force) behind it?
Citadel Securities, Fidelity Investments, Charles Schwab, Sequoia Capital, Paradigm and other companies announced that they will jointly launch EDX Markets.
In terms of core leadership, Jamil Nazarali, former global head of business development at Citadel Securities, will serve as CEO of EDX Markets, while Tony Acuña-Rohter, former chief technology officer of ErisX, and David Forman, former general counsel of Fidelity Digital Assets, will serve as CTO and general counsel, respectively.
Among them, Schwab/Fidelity is the largest retail securities broker in the United States. Citadel and Virtu are the top market makers on Wall Street.
At the same time, EDX Markets also announced the completion of a new round of financing, with participation from Miami International Holdings, DV Crypto, GTS, GSR Markets LTD and HRT Technology. The new funds raised in this round of financing will be used to support EDX Markets to continue developing its trading platform and consolidate its market leadership.
There are 4 tokens listed on EDX Markets #BTC #ETH #LTC #BCH , and none of them are on the list of securities recognized by the SEC
EDX Markets, which is backed by several traditional financial giants, tells a completely different narrative from Binance, Coinbase and others. Whether it can gain a foothold in the Crypto world, or even bring more funds and liquidity to this emerging market, remains an unknown for the time being.