According to Bloomberg, EDX Markets, a cryptocurrency exchange platform supported by Citadel Securities and Fidelity Digital Assets, plans to establish an exchange in Singapore and offer spot and perpetual futures trading services. The company’s CEO, Jamil Nazarali, stated that EDX has completed its second round of financing led by new investors Pantera Capital and existing supporter Sequoia Capital. The newly raised funds will be used for developing new technologies and expanding EDX’s business in overseas markets. EDX is seeking approval from the Monetary Authority of Singapore (MAS) to operate the exchange in Singapore. Nazarali mentioned that EDX operates as a “non-custodial” exchange, providing a platform for institutional investors to directly trade cryptocurrencies such as Bitcoin, Ether, and Litecoin, allowing them to hedge their exposure to ETF products. To attract institutional investors, EDX has established its own clearinghouse and outsourced the custody role to Anchorage Digital to avoid potential commingling of funds. In the non-custodial model, EDX does not require investors to pre-fund their transactions with fiat or cryptocurrency. Instead, users deposit their net amounts into an Anchorage account within the settlement period and can withdraw their profits after daily settlements without affecting their trading limits. The closure of FTX, a cryptocurrency exchange that failed to separate custody, market-making, and trading operations, has drawn criticism as it may lead to conflicts of interest and manipulation of funds. Paul Veradittakit, a managing partner at cryptocurrency investment firm Pantera, emphasized the need for a non-custodial model in the current cryptocurrency environment to manage risks and address complexities in liquidity and operational efficiency. EDX’s other supporters include well-known figures from the traditional financial industry, and the latest round of investors includes existing supporters Citadel Securities, Virtu Financial, Sequoia Capital, and Fidelity Digital Assets. According to insiders, the per-share price acquired by investors in this financing round is double the initial investment in 2022. Other investors in EDX include Charles Schwab Corp., GSR Markets, GTS, Hudson River Trading, Miami International Holdings Inc., and Paradigm. According to EDX, its clients’ nominal trading volume exceeded $1.4 billion in December, and its clearinghouse has cleared over $3.1 billion in transactions since its launch in October of last year. Nazarali stated that following the approval of a Bitcoin spot ETF, EDX’s clients traded over $100 million within a single 24-hour period this month. Nazarali observed that larger Bitcoin ETFs traded at prices higher than the market’s expected fair value, while smaller ETFs experienced discounts. He mentioned the existence of arbitrage opportunities but noted that dealing with actual coins is required to take advantage of them.
