In the latest institutional play in crypto, digital asset exchange EDX Markets (EDXM), announced today it will work with Paxos as its custodian.
Paxos is regulated by the New York Department of Financial Services and will hold all EDXM customer assets in a bankruptcy-remote trust, in fully segregated U.S. accounts, it said in a release.
The exchange, which is backed Citadel Securities, Charles Schwab and Fidelity Investments, plans to launch towards the end of the year, the firm's CEO Jamil Nazarali told The Block in an interview. Compliance and security are key differentiators of EDXM’s offering, Nazarali added.
MEMX is a market operator founded in 2019, it will provide the technology infrastructure for EDXM. MEMX was founded by Bank of America Merrill Lynch, Charles Schwab and Citadel Securities, among others — Nazarali was involved in the founding in his role as global head of business development.
"Paxos’ best-in-class solutions along with MEMX’s technology powering the exchange, EDXM now has all the tools to make institutional-grade digital asset trading available to investors for the first time," he told The Block.
Paxos solution enables the movement of all assets at any time in a trustworthy way, said Paxos' Head of Strategy, Walter Hessert. "Together with EDXM, we are creating an easy path for banks and other financial institutions to access crypto markets in the most regulated way available," he concluded.
Paradigm, Sequoia Capital and Virtu Financial are also part of the consortium backing EDXM, and it's anticipated additional market participants will partner with the exchange over time.
Correction: This story has been updated to reflect that EDX Markets is Citadel Securities backed venture.
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