EDX Markets: Wall Street’s crypto exchange
EDX Markets is fresh on the scene. It is a crypto exchange promoted by Wall Street firms. The aim of the project is to conquer the industry and oust industry-owned companies. How a new concept could revolutionize the market.
EDX Markets: Wall Street’s crypto exchange EDX Markets: How the crypto exchange could revolutionize the industry
At the end of May, the Financial Times reported for the first time on so-called Wall Street companies that would be looking to enter the crypto industry. The aim is to conquer the young industry. In the meantime, EDX Markets is actually the first representative of this kind.
The Financial Times named classic financial companies such as Standard Chartered, Nomura, and Charles Schwab as interested parties, which did not want to simply leave the new financial sector to newcomers.
A few years ago, it was not possible to predict with certainty that classic financial companies would increasingly enter the crypto market. The hatred for each other was deep. In 2019, several people from the traditional financial industry founded the crypto exchange FTX.
Managing director Sam Bankman-Fried never made a secret of the fact that he rejected cryptocurrencies. Nevertheless, according to his reasoning, one can use the market to make profits.
Companies like Charles Schwab hold similar positions. The brokerage company took its first steps into the crypto industry in 2022 and nevertheless explicitly warned the public about crypto currencies.
Meanwhile, it has partnered with Citadel Securities and Fidelity Investments to promote a crypto exchange called EDX Markets. The marketplace began operations on June 20, he announced in a press release .
Wall Street firms believe their big names can help them achieve quick wins. In addition, they want to capitalize on the weakness in the crypto industry. According to their knowledge, the lack of transparency that would have led to the collapse of FTX.
How crypto exchange EDX Markets could revolutionize the industry
EDX Markets already proves that new approaches are used. It is a crypto exchange that never stores the cryptocurrencies of its users. Instead, trading partners agree on a purchase and sale price in US dollars via the platform.
After the agreement, one trading partner transfers the desired cryptocurrencies to the second trading partner, while the other sends the agreed fiat money. What initially sounds like a problematic concept should work reliably in practice, since EDX Markets is initially only open to institutional investors.
Over the next few months, the crypto exchange wants to acquire new licenses that would allow it to operate as a clearing house. Nevertheless, one wants to retain an alternative concept.
Instead of storing the cryptocurrencies of the users themselves, one wants to delegate this task to a third party. This is to avoid the possibility of committing fraud yourself. This is intended to create a particularly high level of trust among users.
According to EDX CEO Jamil Nazarali, the idea came about as a result of the FTX scandal, during which billions in customer deposits were embezzled. Such a concept is so far unusual. Nazarali was a long-time Citadel employee before joining EDX.
Why EDX only offers four cryptocurrencies
EDX Markets only offers four cryptocurrencies for trading: Bitcoin, Ethereum, Litecoin and Bitcoin Cash. None of the coins has ever been classified as an illegal security by the US authority SEC.
Apparently, the modest offer was deliberately chosen to avoid conflicts with US authorities. It cannot be ruled out that the marketplace will nevertheless be expanded to include further cryptos in the future.
