EDX, a recently launched cryptocurrency exchange, is reportedly preparing to switch its custody provider from Paxos Trust to Anchorage Digital.
The exchange, which received support from prominent traditional finance entities like Citadel Securities, Fidelity Digital Assets, and Charles Schwab, operates on a noncustodial business model aimed at eliminating conflicts of interest.
EDX currently facilitates trading in two cryptocurrencies, Bitcoin and Bitcoin Cash.
Notably, Bitcoin Cash has experienced significant growth since the exchange’s inception, with a 70.43% increase over the past week and a remarkable 101.36% surge in the last month.
Following the exchange’s announcement of its partnership with Paxos in October, the United States Securities and Exchange Commission proposed stricter custody regulations for crypto firms.
Paxos, holding a BitLicense from the New York Department of Financial Services, faced an investigation earlier this year for undisclosed reasons.
Additionally, Paxos obtained preliminary conditional approval for a U.S. bank charter from the United States Comptroller of the Currency (OCC) in 2021, but that approval reportedly lapsed by the end of March.
Anchorage Digital, on the other hand, became the first crypto firm to receive a national trust bank charter from the OCC in January 2021.
However, it faced regulatory issues a year later due to Anti-Money Laundering deficiencies and subsequently agreed to a consent order.
Shortly thereafter, Anchorage Digital formed a custody network with prominent crypto exchanges including Binance.US, CoinList, Blockchain.com, Strix Leviathan, and Wintermute.
EDX has plans to introduce EDX Clearing, a clearinghouse designed to settle trades executed on the EDX Markets platform, later this year.
While EDX declined to comment on the change of its custody provider, Anchorage Digital did not respond to requests for comments regarding the matter.
The decision to switch custody providers signifies EDX’s commitment to establishing a secure and compliant infrastructure for its users.
With the support of reputable financial heavyweights and the intention to introduce a clearinghouse, EDX aims to enhance its trading platform and ensure a seamless experience for cryptocurrency traders.
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