Key Takeaways
- • EDX Markets (EDXM) launched as a new digital asset exchange backed by Charles Schwab, Citadel Securities, Fidelity Digital Assets, Paradigm, Sequoia Capital and Virtu Financial, with additional market participants expected to join over time.
- • The exchange will use exchange technology provided by MEMX, the market operator founded in 2019, to offer U.S. retail and institutional investors cryptocurrency trading through trusted intermediaries.
- • EDXM plans to net and settle trades on the blockchain via a network of select digital custodians, aiming to reduce spreads, lower settlement costs and separate exchange operation from trading participants.
- • Leadership includes CEO Jamil Nazarali, formerly of Citadel Securities; CTO Tony Acuña-Rohter, formerly of ErisX; and General Counsel David Forman, formerly of Fidelity.
Summary
A consortium of broker-dealers, global market makers and venture capital firms announced the launch of EDX Markets (EDXM) on September 13, 2022, describing it as a first-of-its-kind digital asset exchange intended to enable safe and compliant cryptocurrency trading through trusted intermediaries, according to a Business Wire release. The exchange is positioned to serve both U.S. retail and institutional investors.
EDXM is operated as a fully independent entity. Its backers include Charles Schwab, Citadel Securities, Fidelity Digital Assets, Paradigm, Sequoia Capital and Virtu Financial, and the company said additional market participants are expected to partner with the exchange over time. Representatives from the founding member firms make up the Board of Directors.
The platform will rely on technology from MEMX, an market operator founded in 2019, which will provide the infrastructure for EDXM. According to the announcement, the exchange will aggregate liquidity from multiple market makers to reduce spreads and improve price discovery, with the company expecting better prices for investors than those offered by existing cryptocurrency exchanges. Trades will be netted and settled on the blockchain through a network of select digital custodians, which the company says will reduce cost and eliminate the need for bilateral settlement. EDXM also states that separating responsibility for operating the exchange from the entities trading on it will address conflicts of interest it attributes to existing crypto exchanges.
EDXM has named Jamil Nazarali, formerly Global Head of Business Development at Citadel Securities, as CEO; Tony Acuña-Rohter, previously CTO at ErisX before its acquisition by Cboe Global Markets, as CTO; and David Forman, formerly Chief Legal Officer at Fidelity Brokerage Services and General Counsel of Fidelity Digital Assets, as General Counsel. The company said it will add further executives from crypto and traditional financial services.
EDXM's board cited the size of the market, describing crypto as a $1 trillion global asset class with more than 300 million participants. Jonathan Kellner, CEO of MEMX, said the partnership marks a new chapter for MEMX as it brings its market technology to other asset classes and market operators.
EDXM is operated as a fully independent entity. Its backers include Charles Schwab, Citadel Securities, Fidelity Digital Assets, Paradigm, Sequoia Capital and Virtu Financial, and the company said additional market participants are expected to partner with the exchange over time. Representatives from the founding member firms make up the Board of Directors.
The platform will rely on technology from MEMX, an market operator founded in 2019, which will provide the infrastructure for EDXM. According to the announcement, the exchange will aggregate liquidity from multiple market makers to reduce spreads and improve price discovery, with the company expecting better prices for investors than those offered by existing cryptocurrency exchanges. Trades will be netted and settled on the blockchain through a network of select digital custodians, which the company says will reduce cost and eliminate the need for bilateral settlement. EDXM also states that separating responsibility for operating the exchange from the entities trading on it will address conflicts of interest it attributes to existing crypto exchanges.
EDXM has named Jamil Nazarali, formerly Global Head of Business Development at Citadel Securities, as CEO; Tony Acuña-Rohter, previously CTO at ErisX before its acquisition by Cboe Global Markets, as CTO; and David Forman, formerly Chief Legal Officer at Fidelity Brokerage Services and General Counsel of Fidelity Digital Assets, as General Counsel. The company said it will add further executives from crypto and traditional financial services.
EDXM's board cited the size of the market, describing crypto as a $1 trillion global asset class with more than 300 million participants. Jonathan Kellner, CEO of MEMX, said the partnership marks a new chapter for MEMX as it brings its market technology to other asset classes and market operators.
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