A new crypto exchange backed by several Wall Street heavyweights such as Charles Schwab
SCHW,
Citadel Securities, Fidelity Digital Assets, Paradigm, Sequoia Capital, and Virtu Financial, has started operation.
The exchange, called EDX Markets, was launched in September. It currently allows trading of bitcoin
BTCUSD,
ether
ETHUSD,
Litecoin
LTCUSD,
and Bitcoin Cash
BCHUSD,
according to a statement Tuesday.
EDX is a “noncustodial” exchange, meaning it doesn’t directly deal with its customers’ cryptocurrencies, the Wall Street Journal reported. Instead, EDX operates a exchange where firms agree to execute trades of crypto and dollars, while using the platform to agree on prices. Then the firms move crypto and cash between each other to settle the trades.
EDX will launch a clearing house to settle trades later this year, the company said. Still, even then the company plans to use third-party banks and a crypto custodian to hold customer assets, the Wall Street Journal reported.
In contrast, most centralized crypto exchanges require their customers to park their cash and coins in wallets run by the exchanges.
The move comes after the Securities and Exchange Commission recently sued both crypto exchanges Binance and Coinbase
COIN,
SEC chairman Gary Gensler has repeatedly said most crypto are securities and should fall into the agency’s jurisdiction, while bitcoin is the only crypto he is comfortable labelling as a commodity.
EDX has recently closed a new funding round, where the investors include Miami International Holdings, DV Crypto, GTS, GSR Markets LTD, and HRT Technology.
This story originally appeared on Marketwatch
