Despite the recent regulatory pressure in the United States, some institutions have not given up on cryptocurrencies. On June 20, EDX Markets, a cryptocurrency exchange supported by Wall Street forces such as Citadel Securities, Fidelity Investments and Charles Schwab, went public and began trading, attracting the attention of many investors. The exchange is committed to providing a safe and regulated platform for institutional investors, and only lists four cryptocurrencies: Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and Bitcoin Cash (BCH). So, what is the origin of this new cryptocurrency exchange EDX Markets? Why only the above products are listed? The following will analyze them for you one by one.
Introduction to EDXMarkets Exchange
In early June, the U.S. Securities and Exchange Commission (SEC) suddenly stepped up its regulation of cryptocurrencies, filing lawsuits against two top exchanges, Binance and Coinbase, which dealt a heavy blow to the cryptocurrency market. At this time, a new exchange, EDX Markets, suddenly appeared in people's view and received a lot of attention.
Why is this?
The reason why EDX Markets has attracted so much attention is mainly because of its strong endorsement. The exchange is backed by Wall Street giants such as Citadel Securities, Fidelity Investments and Charles Schwab, and has received financing from Sequoia Capital, Paradigm and Virtu Financial, and is very guaranteed in terms of regulatory compliance.
EDX Markets' mission is to translate traditional financial concepts into the cryptocurrency market, with an eye on regulatory compliance and minimizing conflicts of interest. In a statement, Jamil Nazarali, CEO of the exchange, said EDX will take a path that institutional investors prefer to enter the cryptocurrency market.
Despite the industry challenges, Jamil Nazarai believes that EDX’s success in attracting new investors and partners demonstrates the need for regulation in the cryptocurrency market and that they will be committed to bringing sound, mature financial practices to the Bitcoin space.
As David Schwed, COO of Halborn Security, said, the infrastructure required for Wall Street banks to enter the field has been established by EDX. It is worth noting that to join EDX Markets, a company or organization must be registered with the appropriate agency, have all required licenses, and comply with all financial, credit and related conditions established and maintained by the exchange. The exchange can deny membership if sufficient evidence of system capabilities, integrity or security cannot be provided, or if the applicant has violated the agreement with the exchange.
How is EDX Markets different from other cryptocurrency exchanges?
Unlike other major cryptocurrency exchanges, EDX only allows investors to trade Bitcoin, Ethereum, Litecoin, and Bitcoin Cash.
But more importantly, unlike most current cryptocurrency exchanges, EDX Markets adopts a "non-custodial model", which means that they do not directly handle customers' digital assets, and are based on traditional financial markets, mainly targeting brokers and investors who are concerned about the safety of their funds.
In other words, the approach taken by the EDX exchange is more like that of traditional financial traders. Users will have to buy and sell crypto assets through financial intermediaries, similar to the way transactions are executed on the New York Stock Exchange (NYSE) and NASDAQ. This will largely avoid the problem of misappropriation of user funds by the FTX exchange.
Additionally, EDX Markets has launched retail-only listings where traders can get better rates for retail orders
Why does EDX exchange only list BTC, ETH, LTC and BCH?
EDX Markets only offers trading in four cryptocurrencies, Bitcoin, Ethereum, Litecoin and Bitcoin Cash, to its traders (institutional investors only), for the simple reason of regulatory clarity. Jeff Feng, co-founder of Sei Labs, said, “These specific cryptocurrencies are generally considered commodities by regulators, which greatly mitigates potential legal dangers.”
Youwei Yang, chief economist at BTCM, added that the four assets are “broadly considered digital commodities and therefore relatively safe” by the SEC.
In two lawsuits filed by the SEC in early June, at least 67 cryptocurrencies were labeled as securities, with a total market value of more than $100 billion. None of the above four assets were mentioned.
Additionally, SEC Chairman Gary Gensler has explicitly stated that Bitcoin is a commodity. Although he has been less clear about Ethereum, the Commodity and Futures Trading Commission (CTFC) has stated that the asset is a commodity.
Both Bitcoin Cash and Litecoin are forks of Bitcoin (new cryptocurrencies created from the asset's original code), which means they may have the same status in the eyes of regulators.
Jamil Nazarali, CEO of EDX Markets, added that he felt very comfortable that the four assets were not securities.
