- Some major financial companies have announced that they will launch a crypto exchange
- This is another big foray of traditional players after BlackRock’s filing of the Bitcoin ETF
Since the rise of cryptocurrencies, we saw most of the traditional finance players criticizing the decentralized mechanism. However, as the technology grew and more solutions came out, crypto strengthened its ground. And today, we are seeing the United States’ largest financial firms venturing into this digital assets space.
Is the timing coincident or planned?
Yes, you read it right, according to a press release, Citadel Securities, Charles Schwab, and Fidelity Digital Assets are launching a crypto exchange called EDX. Like all the leading platforms, this one will also offer trading on all the major cryptocurrencies.
The Wall Street veteran and current CEO of Custodia Bank, Caitlin Long commented on this development. Talking to Defiant, she said the move is very unexpected. After the crackdown of the SEC on crypto exchanges, this was bound to happen sooner or later.
She said that it is quite possible that the mainstream companies were waiting for the current crypto incumbents to get diminished to some extent. The vintage investor insinuated that it is a very opportune time to launch a crypto exchange when the renowned platforms of the sphere are engaged in a legal battle.
The Securities and Exchange Commission sued Coinbase as well as Binance for irregularities. It also dragged Ripple to court for the same allegations. In fact, pro-XRP lawyers and crypto supporter John Deaton said that the regulator will be lenient on crypto operations once the traditional companies make a foray into it.
At the same time, we are seeing different countries framing regulatory frameworks for crypto operations too. Notably, the Republicans from the United States and the European government have prepared a draft that will regulate the working of crypto assets.
Some are sensing bias
According to prominent investor Adam Cochran, the lawsuits filed against the native crypto exchanges are probably an attempt from the traditional biggies to clear the field for them. Otherwise, the launching of a new exchange and filing for the ETF would not have been at the same time when old platforms are facing a crackdown.
He also pointed out the fact that there are high chances of BlackRock attaining the ETF license. On the other hand, all the other companies that have applied for it earlier have been denied by the regulator.
Furthermore, he indicated that if BlackRock obtains the approval then it will surely spark a controversy. That’s because all the companies whose applications were turned down will seek an answer from SEC now. They all are going for some explanation from the regulator.
Long asserted that it surely seems that the regulators are favoring the established companies and actually helping them set their feet into this sphere. But at the same time, we can’t say that digital asset projects are victimized without any reason.
Clearing her stance, Long said that she’s not defending the actions of crypto exchanges here. Rather, she emphasized that a large number of them need to come under scrutiny. Another thing that debunks the theory of regulators and big companies forging an alliance is that the plan of launching EDX was unveiled last year before SEC’s crackdown on exchanges.