EDX Markets, a startup cryptocurrency exchange backed by Charles Schwab, Fidelity and Citadel Securities, is reportedly ending its planned partnership with Paxos and nearing a deal with Anchorage Digital. there is bloomberg.
Previously, EDX Markets announced a partnership with Paxos last October. Known for issuing the Binance stablecoin BUSD, the New York-based blockchain company will act as a custodian of crypto assets for EDX customers, while providing Paxos customers with direct access to EDX. would have been supposed to This plan is now abandoned.
San Francisco-based Anchorage Digital is a U.S. crypto asset management company that holds a banking license from the Office of the Comptroller’s Office (OCC). Despite criticism from the OCC in 2021 for the lack of key anti-money laundering measures, the company has agreed to make the necessary corrections. Anchorage, which is valued at more than $3 billion after a 2021 funding round, cut its workforce by about 20% in March.
EDX CEO Jamil Nazarari said last week that the company is working with a third-party custodian, but did not name the new partner. Both EDX Markets and Anchorage Digital have chosen not to comment on the matter.
The EDX website currently lists Anchorage as a partner, but does not specifically list Paxos. A Paxos spokesperson commented: We are very excited about what his EDX is building and he hopes to support EDX customers with our regulated custody regime as banks and brokers join the platform. . “
EDX’s choice of custodian is essential due to the exchange’s non-custodial model, which contrasts with existing crypto platforms such as Coinbase and Binance Holdings Ltd. in not holding customers’ digital assets while trading. .
Paxos Regulatory Issues
Paxos has been under regulatory scrutiny from multiple directions over the last year. In February, the state of New York ordered Paxos to stop issuing the Binance-branded stablecoin BUSD. Additionally, Paxos received a Wells notice from the U.S. Securities and Exchange Commission in February, suggesting regulators were investigating the company and considering litigation.
Paxos disputes these accusations and intends to defend them in court. Meanwhile, SEC officials claimed that major cryptocurrency exchange Binance transferred nearly $20 billion of mixed funds to Paxos in 2021 through trading firm Merit Peak. To date, the SEC has not filed charges.
