Institutional crypto exchange EDX Markets has selected Anchorage Digital to provide custody solutions for its upcoming clearinghouse business.

Anchorage Digital will provide regulated custody for EDX Clearing when it launches later this year, according to a statement. EDX Markets previously announced it would work with Paxos as a custodian in October.

"Anchorage Digital has a robust security, governance, risk and compliance framework, which will provide a best-in-class solution to meet the needs of our institutional client base," EDX CEO Jamil Nazarali said. "As the only federally chartered crypto bank in the U.S., Anchorage Digital Bank is the ideal partner to support EDX’s build of a robust and compliant clearinghouse business."

EDX Clearing will settle trades on EDX with a single settlement process designed to enhance capital and operational efficiency, providing clearing services to EDX clients using Anchorage Digital Bank for custody of traded assets.

"Drawing from the blueprint of traditional finance will be critical to unlocking the next phase of institutional crypto," said Anchorage Digital co-founder and president Diogo Mónica. "Anchorage Digital has proven that separating custody and exchange functions for institutions isn’t just possible, it’s essential."

Major backers

Backed by major financial firms, including Citadel Securities, Fidelity Digital Assets and Charles Schwab, EDX Markets was first announced in September. It also has support from Paradigm, Sequoia Capital and Virtu Financial.

Nazarali said in an interview with The Block at the time that the platform would learn from the mistakes of others who tried to attract Wall Street to digital assets. "There seemed to be a void in the marketplace for a true exchange," he said.

EDX Markets went live in June, offering trading in four crypto assets including bitcoin, ether, litecoin and bitcoin cash.

Last month, EDX integrated with the trading platform Talos, expanding its institutional clients’ access to a network of over 40 liquidity venues.