Finance Giants Join Forces To Launch Crypto Exchange

A new crypto exchange has gained the support of a swath of broker-dealers, market makers and venture capital firms as executives from the companies comprise the young company’s leadership.

Charles Schwab, Citadel Securities, Fidelity Digital Assets, Paradigm, Sequoia Capital and Virtu Financial are among the backers for the new company, called EDX Markets. The exchange is set to go live in early 2023, according to a spokesperson.

Jamil Nazarali, the former global head of business development at Citadel Securities, joined EDX Markets as its CEO in July. Tony Acuña-Rohter, previously a chief technology officer at ErisX, now works in the same role for the new exchange. David Forman, a former chief legal officer at Fidelity Brokerage Services and general counsel for Fidelity Digital Assets, is EDX Market’s general counsel. 

Representatives from the founding member firms comprise EDXM’s board of directors.

“Crypto is a $1 trillion global asset class with over 300 million participants and pent-up demand from millions more,” the company’s board said in a statement. “Unlocking this demand requires a platform that can meet the needs of both retail traders and institutional investors with high compliance and security standards.”

The exchange seeks to aggregate liquidity from multiple market makers to reduce spreads, improve transparency and lower investor costs, a company spokesperson told Blockworks. MEMX will provide the technology infrastructure for EDX Markets.

The participation from companies such as Charles Schwab and Fidelity Digital Assets in launching the exchange marks a continued interest in crypto from the financial services titans. 

The latter company’s parent company moved to allow certain US workers to allocate a portion of their retirement savings to bitcoin through the company’s 401(k) plan investment lineup. Fidelity Investments is also reportedly mulling how to allow retail customers to trade bitcoin on its brokerage platform, according to the Wall Street Journal.

Charles Schwab launched its first crypto-related ETF last month. The fund’s top holdings include Marathon Digital, Riot Blockchain, MicroStrategy and Coinbase. 

Other traditional finance players have also jumped deeper into the space in recent months, despite the so-called crypto winter. 

BlackRock, the world’s largest asset manager with roughly $8.5 trillion, partnered with Coinbase last month and days later launched a bitcoin private trust. More recently, Franklin Templeton revealed its intention last week to offer its first crypto-focused separately managed accounts (SMAs) to investment professionals.

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