Citadel is partnering up with Charles Schwab, Fidelity, Sequoia, Paradigm, and Virtu to launch EDXM, a cryptocurrency exchange.
The fall of FTX was primarily due to centralized players so what’s to say EDXM won’t be subject to such errors?
EDXM’s custody and wallet technology is being provided by crypto custody and infrastructure company Paxos, the companies announced in October.
Paxos, which is a custodian regulated by New York state, holds customer accounts in fully segregated accounts and has signed up large consumer-facing clients to enable crypto trading.
Its customers include PayPal, broker dealers such as Interactive Brokers, and others such as Nubank and Mastercard.
Crypto is still a taboo area for most of Wall Street, but with companies such as Citadel and its partners, it could attract big institutional money.
Here’s the latest crypto news.
What is EDXM?
EDXM is a new crypto exchange being developed by Wall Street giants such as Citadel, Virtu, and Fidelity for digital assets such as cryptocurrencies.
EDXM plans to offer delivery settlement versus payment settlement, a settlement method that’s used in traditional securities trading.
Other promises include extremely low transaction fees due to tight spreads enabled by greater liquidity.
The crypto exchange is also supposed to be different from some other crypto providers that are the market maker, exchange, and custodian all in one, which can be a conflict of interest and is typically not done in traditional markets.
Sort of like how Citadel is a market maker, hedge fund, and dark pool.
The head of strategy at Paxos says EDXM will provide transparency for the crypto market.
Some investors might argue that Citadel and its partners should provide more transparency in the stock market first before making such claims for the cryptocurrency market.
While some on Wall Street might think EDXM could lift the crypto industry, others look at the partnership as a means for Wall Street to take advantage of investors elsewhere.
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