In a recent development, Binance CEO CZ expressed his support for a new cryptocurrency exchange called EDX, which boasts backing from prominent financial institutions including Citadel Securities, Fidelity Investments, and Charles Schwab. CZ took to Twitter, sharing a screenshot of a Wall Street Journal article about the exchange and commenting on its impeccable timing. Applauding developments in times of regulatory scrutinies, he believes more competition in the crypto space is a positive thing. As a crypto exchange CEO, he is not threatened by emerging players due to a broader vision.
Though CZ has expressed relief over the SEC disagreement settlement, the SEC is still wary of crypto developments in the US. New Exchange EDX, a “noncustodial” platform, is set to offer trading exclusively in Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Bitcoin Cash (BCH) initially. The company plans to launch a clearinghouse later this year to settle trades. According to the Wall Street Journal, even after the clearinghouse is operational, EDX intends to rely on third-party banks and a crypto custodian to hold customer assets.
This move comes as both Binance, including CZ, and Coinbase face legal action from the Securities and Exchange Commission (SEC). The regulatory scrutiny surrounding crypto exchanges has been primarily driven by SEC Chairman Gary Gensler’s assertion that most cryptocurrencies should be classified as securities falling under the agency’s jurisdiction. Recently, the SEC Chair spoke about the need to protect investors, saying that the crypto market should not be allowed to harm them.
In addition to the backing from prominent US firms Citadel Securities and Fidelity Investments, EDX recently concluded a funding round with investors such as Miami International Holdings, DV Crypto, GTS, GSR Markets LTD, and HRT Technology.
On one hand, the entry of well-established financial institutions into the crypto space might add credibility to the market, especially in the eyes of regulators. However, skeptics might argue that new exchanges backed by traditional financial powerhouses may end up prioritizing their profits over the ethos of decentralization that underpins the blockchain and cryptocurrency movement.
The timing of this news is indeed interesting, as it comes amidst regulatory tensions and legal challenges faced by leading crypto exchanges such as Binance and Coinbase. While more competition might spur innovation and growth in the sector, it remains to be seen how the battle between regulatory goals and the core values of the crypto community will play out. In any case, it would be unwise for investors and market enthusiasts to disregard the potential impact of these ongoing developments on the future trajectory of the cryptocurrency market.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
Source: Coingape
