EDX, a cryptocurrency exchange that was launched just a week ago, is reportedly planning to change its custody provider. The exchange, which has received support from prominent traditional finance players such as Citadel Securities, Fidelity Digital Assets, and Charles Schwab, is looking to replace Paxos Trust with Anchorage Digital. EDX follows a noncustodial business model that aims to eliminate conflicts of interest.

Currently, EDX supports trading in four cryptocurrencies: Bitcoin, Ether, Litecoin, and Bitcoin Cash. As of the time of writing, the price of Bitcoin Cash (BCH) has increased by 70.43% since the launch of EDX and by 101.36% in the past month.

In October, EDX had announced its partnership with Paxos to handle the custody and wallet infrastructure of digital assets, shortly after unveiling the exchange's launch. However, the United States Securities and Exchange Commission (SEC) has proposed stricter custody regulations for cryptocurrency firms. In light of this development, EDX has decided to make the switch from Paxos to Anchorage. A spokesperson from Paxos confirmed this information to Cointelegraph:

Blockchain infrastructure platform Paxos is in possession of a BitLicense issued by the New York Department of Financial Services. Earlier this year, reports emerged stating that the agency was conducting an investigation into Paxos for reasons that were not specified. In 2021, Paxos received "preliminary conditional approval" from the United States Comptroller of the Currency (OCC) for a U.S. bank charter. However, it has been reported that this approval expired at the end of March.

Anchorage Digital made history in January 2021 as the first cryptocurrency firm to obtain a national trust bank charter from the OCC. However, it encountered regulatory issues related to Anti-Money Laundering (AML) deficiencies a year later, leading to the acceptance of a consent order. In the wake of this development, Anchorage Digital forged a custody network in collaboration with prominent cryptocurrency exchanges such as Binance.US, CoinList, Blockchain.com, Strix Leviathan, and Wintermute.

In a separate development, EDX has announced its plans to introduce EDX Clearing, a clearinghouse designed to settle trades executed on the EDX Markets platform, later this year. When approached for comment regarding its custody provider, EDX declined to offer any details, while Anchorage Digital did not respond to the request for comment.