JAN 26, 2024
EDX Markets plans Asian expansion enabled by additional funding
EDX Markets, a crypto-trading platform backed by Citadel Securities and Fidelity Digital Assets, is planning to establish a new crypto exchange in Singapore.
The plan was revealed in a recent Bloomberg article. In tandem with the report, a press release published on Tuesday also provided further detail on its recently-launched digital asset clearinghouse, EDX Clearing. Unlike traditional exchanges, EDX operates its own clearinghouse, following a non-custodial model in collaboration with Anchorage Digital. This approach allows institutional investors to execute trades without the need for pre-funding in fiat currency or crypto, contributing to capital efficiency and risk management.
Since its launch in October, EDX Clearing has cleared more than $3.1 billion of transactions. The recent approval of bitcoin exchange-traded funds has further intensified trading activity, with substantial volumes traded following their launch.
EDX Markets offers a unique platform for institutional investors to directly trade major cryptocurrencies like bitcoin, ether and litecoin. EDX addresses institutional players' needs with a non-custodial model, emphasizing risk management and infrastructure that aligns with traditional market practices.
Fresh funding infusion
The company is also introducing spot and perpetual futures trading, following a successful additional funding round led by new investor Pantera Capital and existing supporter Sequoia Capital.
The recent funding infusion, the exact size of which was not disclosed, empowers EDX Markets to enhance its technology and expand its global footprint. The firm’s CEO, Jamil Nazarali, highlighted Singapore's strategic significance, citing its favorable environment for trading a diverse range of tokens and perpetual futures, along with its pool of financial talent.
The platform has gained support from traditional finance heavyweights such as Charles Schwab and Miami International Holdings, alongside original backers Citadel Securities, Virtu Financial and Fidelity Investments' digital-asset arm. The recent funding round saw investors buying in at double the initial share prices from 2022.
According to Paul Veradittakit, Managing Partner at Pantera Capital, EDX mirrors traditional market expectations, incorporating speed and capital efficiency while adapting to the unique features of the crypto landscape. Taking to the X social media platform, Veradittakit wrote:
”We believe that EDX markets reduces counterparty risk for institutions through its non-custodial clearing model.”
EDX Markets has witnessed noticeable trading volumes, with over $1.4 billion in notional volume traded in December alone. The company, headquartered in Hoboken, New Jersey, plans to build out its technology independently and transition away from its initial partnership with MEMX (Members Exchange).
The expansion into Singapore involves seeking approval from the Monetary Authority of Singapore (MAS) to operate an exchange offering both spot and perpetual futures trading.
In December, EDX's clients traded more than $1.4 billion in notional volume. Following the approval of spot bitcoin exchange-traded funds (ETFs), EDX customers executed trades totaling more than $100 million in a single 24-hour period this month.
While many in the sector welcome the involvement of TradFi in the crypto space, some have concerns with regard to how things play out over the longer term. Community member Joe Kerr took to social media on the subject, stating:
”My concern is that they’ll use the ETFs to buy from public exchanges, custody with Coinbase but when shares sell, the Bitcoin is bought through EDX and locked behind an ‘institutions only’ firewall.”