EDX Markets has joined forces with Anchorage Digital, a regulated cryptocurrency platform, to introduce a custody solution for EDX's upcoming clearinghouse venture. In a statement released yesterday (Tuesday), the firms said this strategic partnership aims to bring traditional market structure standards to the digital asset space.

EDX is an institutional crypto exchange that made its debut in June 2023. The exchange is backed by major financial institutions, including Fidelity, Virtu Financial, Charles Schwab, Sequoia, and Paradigm, among others. EDX decouples the role of custodian and exchange to eliminate the need for clients to entrust their assets to a single entity during trading.

EDX’s Non-Custodial Trading

According to Jamil Nazarali, the CEO of EDX, "(The company) is committed to bringing the best traditional finance market structures to the digital asset ecosystem, and this is the latest step in our journey to promote a safer crypto marketplace. As the only federally chartered crypto bank in the US, Anchorage Digital Bank is the ideal partner to support EDX's build of a robust and compliant clearing house."

By replicating the custody practices in traditional finance, EDX aims to provide a custody model for institutional investors. According to the company, this enables investors to choose the custodian they trust, ensuring that their assets are only tied up for a short period of time.

In June, Finance Magnates reported that EDX Markets had commenced its trading operations and completed a new funding round that brought additional strategic investors on board. As part of its forward-looking strategy, the company announced that it would introduce EDX Clearing, a clearinghouse Clearing House A clearing house is defined as an intermediary between two parties, a buyer and seller, which helps facilitate the overall process from trade inception to settlement. Clearing houses streamline the exchange of payments, securities, or derivatives transactions.The clearing house is situated between two clearing firms who also helps reduce the risk of either member firm failing to honor their respective trade settlement obligations.Buyers and sellers enter into legally binding agreements for the e A clearing house is defined as an intermediary between two parties, a buyer and seller, which helps facilitate the overall process from trade inception to settlement. Clearing houses streamline the exchange of payments, securities, or derivatives transactions.The clearing house is situated between two clearing firms who also helps reduce the risk of either member firm failing to honor their respective trade settlement obligations.Buyers and sellers enter into legally binding agreements for the e Read this Term aimed at enhancing the settlement Settlement Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Read this Term of trades executed on the EDX platform.

Paving the Way for EDX Clearing

Unlike traditional cryptocurrency exchanges, EDX does not hold customers' assets. Instead, users must navigate through financial intermediaries to buy and sell crypto assets. According to the company's statement, this approach alleviates a potential conflict of interest and enhances transparency in trading activities.

EDX's asset portfolio includes renowned cryptocurrencies, such as Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Bitcoin Cash (BCH). On the other hand, Anchorage is a regulated crypto platform that provides institutions with integrated financial services and infrastructure solutions. The company was founded in 2017 and is headquartered in San Francisco. It is backed by financial investors, such as Andreessen Horowitz, Goldman Sachs, KKR, and Visa.