EDX, a new cryptocurrency exchange backed by Citadel Securities, Fidelity Digital Assets, and Charles Schwab, is reportedly replacing Paxos Trust with Anchorage Digital as its custody provider for digital assets. EDX’s non-custodial business model aims to remove conflicts of interest and avoid scrutiny from the US Securities and Exchange Commission (SEC). The exchange supports trading in Bitcoin, Ether, Litecoin, and Bitcoin Cash. Since its launch, BCH has risen 70.43% in the week and 101.36% in the last month.
EDX initially partnered with Paxos to facilitate the custody and wallet infrastructure of digital assets. However, the SEC recently proposed stricter custody rules for crypto firms, leading EDX to pivot towards a non-custodial offering. Paxos’ BitLicense from the New York Department of Financial Services was under investigation earlier this year for an unspecified reason, and the OCC’s preliminary conditional approval for US bank charter reportedly expired at the end of March.
In contrast, Anchorage Digital received a national trust bank charter from the OCC in January 2021 and formed a custody network with other crypto exchanges shortly after running afoul of the regulator for AML deficiencies. EDX declined to comment on the custody provider switch, while Anchorage Digital did not respond to requests for comment. The exchange also plans to introduce EDX Clearing, a clearinghouse to settle trades executed on the EDX Markets platform.
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