Finance giants expanding their crypto horizons with exchange launch

EDX Markets was first announced in September 2022 and was originally going to launch in early 2023

article-image

Tada Images/Shutterstock modified by Blockworks

share

EDX Markets, a crypto exchange aimed at institutional investors, launched Tuesday after a litany of finance behemoths announced its creation back in September 2022. 

As Blockworks previously reported, the exchange’s major backers include Citadel Securities, Fidelity Digital Assets, Virtu Financial, Charles Schwab, Sequoia and Paradigm. Discussion between Citadel and Virtu around creating a crypto trading platform dates back to at least June of last year.

Observers had a hard time divorcing EDX’s launch from the recent slew of “regulated” crypto entrants such as Prometheum, Deutsche Bank’s attempt to become a crypto custodian, and Blackrock with its interest in a spot bitcoin ETF

Loading Tweet..

Prometheum, in particular, marks the beginning of a trend of firms acquiescing to all or most of the SEC’s demands to operate without incident in the US — unlike Binance and Coinbase, both of which were sued by the securities regulator in early June. 

Like Prometheum, which is the only company so far to receive a rubber stamp from the SEC and FINRA to offer digital asset custody services, EDX appears to be taking a cautious approach with US securities regulators.

To demonstrate that, in the Binance lawsuit, the SEC deemed ten tokens securities, including SOL, ADA, MATIC, FIL, ATOM, SAND, MANA, ALGO, AXS and COTI. The Coinbase suit claimed an additional seven crypto assets were securities including CHZ, FLOW, ICP, NEAR, VGX, DASH and NEXO.

None of the tokens mentioned above are available on EDX at launch, the Wall Street Journal reported. Only four cryptocurrencies — none of which the SEC has said are securities— will be available to trade on the platform. They are bitcoin, ether, litecoin and bitcoin cash. 

Essentially, EDX appears to be getting ahead of the storm. Exchanges left and right have been delisting tokens after the SEC clamped down. Most recently, Bakkt removed support for the native tokens of blockchains such as Solana, Polygon and Cardano. Trading app eToro delisted algorand (ALGO), decentraland (MANA), dash (DASH) and polygon (MATIC) last week.

Additionally, EDX’s crypto operations have been modeled after the stock market, which is under a much clearer regulatory umbrella than crypto. Just as investors don’t have direct access to the New York Stock Exchange, EDX will funnel trades on its marketplace through retail brokerages. This is a key difference from how Binance and Coinbase operate, both of which allow investors to directly trade tokens. 

EDX is also a non-custodial exchange, according to the WSJ, another crucial departure in the business model. Though EDX does plan to launch a clearinghouse to settle trades. Still even after that, it’ll use third-party banks and a crypto custodian.

EDX is set to announce the conclusion of a second funding round on Tuesday.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the Forward Guidance newsletter.

Get alpha directly in your inbox with the 0xResearch newsletter — market highlights, charts, degen trade ideas, governance updates, and more.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 18 - 20, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

Brooklyn, NY

TUES - THURS, JUNE 24 - 26, 2025

Permissionless IV serves as the definitive gathering for crypto’s technical founders, developers, and builders to come together and create the future.If you’re ready to shape the future of crypto, Permissionless IV is where it happens.

recent research

Unlocked Advisory-min.png

Research

This report distills Blockworks Advisory’s research on incentive programs and their analysis, offering a foundation for designing future initiatives and advancing industry-wide standards. By highlighting key lessons and methodologies, we aim to empower protocols to make informed, data-driven decisions.

article-image

The company did about 2.5 times the amount of crypto-backed collateral financing in November compared to the rest of 2024, exec says

article-image

Programmable yield, seamless swaps and decentralized control are the hallmarks of a new stablecoin model

article-image

Crypto is “really exciting,” former SEC Commissioner Paul Atkins said in a podcast interview last year

article-image

Bitcoin is now the “seventh most valuable asset in the world by market cap, just behind the likes of Google and Amazon,” GSR’s Brian Rudick said

article-image

Many analysts expected bitcoin to top $100K before year-end, though it’s been on a post-election tear

article-image

Will investors take a 10% lower return to get access to a regulated investment wrapper?