EDX to replace Paxos custody services with Anchorage.

EDX, a cryptocurrency exchange that was launched a week ago and is supported by big names in traditional finance such as Citadel Securities, Fidelity Digital Assets, and Charles Schwab, is reportedly preparing to change its custody provider. The exchange will drop Paxos Trust and switch to Anchorage Digital. EDX has a non-custodial business model that aims to eliminate conflicts of interest.

EDX allows trading in four cryptocurrencies: Bitcoin (BTC), Ether (ETH), Litecoin (LTC), and Bitcoin Cash (BCH). At the time of writing, BCH has increased by 70.43% in the week since EDX started operating and by 101.36% in the last month.

EDX announced its partnership with Paxos in October to facilitate the custody and wallet infrastructure of digital assets, shortly after the exchange’s launch was announced. Since then, the United States Securities and Exchange Commission has proposed stricter custody rules for crypto firms. A Paxos spokesperson told Cointelegraph:

“EDX shifted its focus to a non-custodial offering at launch. We are very excited about what EDX is building, and we hope to support EDX customers with our regulated custody when banks and brokers onboard to the platform.”

Paxos holds a BitLicense from the New York Department of Financial Services. Earlier this year, the agency was reportedly investigating Paxos for an unspecified reason. Paxos was granted “preliminary conditional approval” for a US bank charter from the United States Comptroller of the Currency (OCC) in 2021, but that approval reportedly expired at the end of March.

Related: Prometheum subsidiary receives FINRA approval for digital asset qualified custody

Anchorage Digital was the first crypto firm to receive a national trust bank charter from the OCC in January 2021. However, it ran afoul of that regulator a year later for anti-money laundering deficiencies and agreed to a consent order. Shortly after that, Anchorage Digital formed a custody network with crypto exchanges Binance.US, CoinList, Blockchain.com, Strix Leviathan, and Wintermute.

1/ EDX Markets, a non-custodial exchange, went live today. That sounds like a contradiction right? Here’s background on EDX and initial thoughts. pic.twitter.com/cPqARF5BmG

— Ram Ahluwalia, higher for longer crypto CFA (@ramahluwalia) June 20, 2023

EDX plans to introduce EDX Clearing, a clearinghouse to settle trades executed on the EDX Markets platform later this year. EDX declined to comment on the matter of its custody provider, and Anchorage Digital did not respond to a request for comment.

Magazine: Unstablecoins: Depegging, bank runs and other risks loom

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