- Company doesn’t want trouble with the SEC
- Paxos comes under pressure from regulators over BUSD
We reported on June 20 that Citadel Securities, Fidelity and Charles Schwab launched the cryptocurrency exchange EDX. The platform was supposed to use Paxos as its custodian, but the company said otherwise.
The exchange does not store cryptocurrency in its own accounts to avoid possible conflicts of interest and problems with the SEC. The decision appears to have been made in light of new requirements for custodial providers in the U.S. and the allegations against FTX.
EDX announced a possible partnership with Paxos last fall, when it first reported that the platform was preparing to launch. But now the organization has changed its mind.
This was reported by Bloomberg, citing its source.. According to the agency, EDX is in talks with Anchorage Digital. It is the first cryptocurrency firm to receive a national trust bank charter from the OCC in 2021.
This is also confirmed by information on the exchange’s official website:
The company declined to comment. Apparently, the breakdown of the preliminary agreement with Paxos is primarily due to pressure on the organization by the authorities.Earlier this year, the firm was the subject of an investigation by the New York City Department of Financial Services. It is also still in talks with the SEC regarding the BUSD stabelcoin.