BlackRock's ETF and Citadel's EDX are making successive moves, is Wall Street taking over the cryptocurrency market?

On June 16th, BlackRock applied for a spot Bitcoin ETF; on June 20th, EDX Markets, a cryptocurrency trading platform backed by Citadel Securities, Fidelity Investments, and Jiaxin Wealth Management, went live. In less than a week, two Wall Street giants have entered the heavily regulated cryptocurrency industry. Perhaps due to the positive signals released by these two events, Bitcoin briefly broke through $29,000 this morning, currently trading at $28,916, with a 24-hour increase of 6.82%.

Although the market response is positive, both Bitcoin and Ethereum have achieved short-term small breakthroughs, but the sentiment of the English-speaking crypto community does not seem to be in line with the market price.

Five days ago, BlackRock, one of the world's largest asset management groups, submitted a filing for a physical Bitcoin ETF to the US SEC through its subsidiary iShares. The majority of the English-speaking community believes that this move is aimed at driving out native cryptocurrency companies and introducing large traditional companies that partner with the US government in an attempt to control Bitcoin and cryptocurrencies.

Following that, the new cryptocurrency trading platform EDX Markets, supported by Citadel Securities, Fidelity Investments, and Charles Schwab, has begun executing trades. At the same time, EDX Markets announced new equity partners for its latest investment round, including Miami International Holdings, DV Crypto, GTS, GSR Markets LTD, and HRT Technology.

BlackRock ETFs are being criticized

Previously, BlockBeats reported that some industry practitioners and communities in the cryptocurrency industry do not seem to support BlackRock's application for a Bitcoin ETF. According to the rules of a Bitcoin ETF, the Bitcoin ETF is only an asset that tracks the price of Bitcoin, and investors own Bitcoin fund shares rather than directly holding Bitcoin. This violates the spirit of cryptocurrency to some extent: "Your keys, your bitcoin. Not your keys, not your bitcoin". (Related reading: "Why is the cryptocurrency community generally pessimistic about BlackRock's application for a Bitcoin ETF under high regulatory pressure?")

Against the backdrop of huge regulatory pressure from the SEC in recent times, the US Securities and Exchange Commission has recently sued four large cryptocurrency trading platforms, including Gemini, Coinbase, Binance US, and Kraken. This means that they may be investigated for suspected violations of US securities trading regulations; the Federal Reserve has closed Silvergate Bank and Signature Bank, two well-known banks that provide services to the cryptocurrency industry; furthermore, the Federal Reserve is deciding whether to approve the relevant requests of two cryptocurrency-friendly banks, Custodia Bank and Protego Trust.

And it is very surprising that BlackRock submitted a Bitcoin ETF application at this time, considering that many previous Bitcoin ETF applications for spot trading have not been approved. Another popular view in the community regarding BlackRock's spot ETF application is "Operation Chokepoint 2.0", which suggests that Wall Street intends to purge the cryptocurrency industry.

Famous KOL AutismCapital (@AutismCapital) expressed on Twitter that BlackRock's decision to launch an ETF under the regulatory pressure of the US Securities and Exchange Commission (SEC) may indicate that the SEC is likely conducting a cleanup operation. The goal is to eliminate "low-level scammers" in the cryptocurrency field, making it easier for "elite giants" in traditional finance in the United States to rebuild a gaming platform according to their own rules.

The co-founder of ReflexivityRes, a digital asset research company, Will Clemente (@WClementeIII), believes that if BlackRock's spot ETF application is approved, "Operation Choke Point 2.0" is likely to be carefully planned. The aim is to drive out native cryptocurrency companies and introduce large traditional companies that partner with the US government in an attempt to control Bitcoin and cryptocurrencies.

As BlackRock's application for a Bitcoin spot ETF is widely criticized, Wall Street is accused of driving out native crypto companies and attempting to control Bitcoin. Meanwhile, backed by Citadel Securities, Fidelity Investments, and GSR, the cryptocurrency trading platform EDX Markets has launched, leading to a public perception of Wall Street attacking crypto exchanges.

Wall Street attacks cryptocurrency exchanges?

5 days ago, well-known KOL Hsaka (@HsakaTrades) listed several events of traditional financial giants entering the cryptocurrency industry on Twitter, implying the "giant financial" attribute of BlackRock's application for a Bitcoin ETF:

- BlackRock files for a spot Bitcoin ETF;

- Soros Fund Management has stated that the timing is ripe for TardFi to acquire cryptocurrency.

- Rumors suggest that EDX, a cryptocurrency exchange supported by Citadel Securities, will go live later this year.

It is surprising to many that the traditional finance industry's attack on the cryptocurrency industry can be so rapid. Just a few days after Hsaka's tweet was released, the EDX trading platform announced its launch. Andrew Parish, co-founder of Arch Public, pointed out that in the past 48 hours, trading companies such as BlackRock, Citadel, Fidelity, JPMorgan Chase, WisdomTreeFunds, and Invesco US have all entered the cryptocurrency field. And all of this happened 7 days after the SEC sued Coinbase and Binance.

Many people believe this is the latest evidence of Wall Street's progress in digital assets during the crypto winter. However, Hsaka believes that while the EDX market is starting to operate, native crypto trading platforms are being drowned in lawsuits and surrounded by fear, causing traditional trading companies to swoop in like vultures.

CEHV partner Adam Cochran (@adamscochran) believes that last week BlackRock, Citadel, Deutsche Bank, and Nasdaq all began to enter the cryptocurrency field. They bully participants so they can get cheap chips. The trajectory of cryptocurrency has never been so clear. Grit Capital CEO Genevieve Roch (@GRDecter) also has a similar view: now we know why the US Securities and Exchange Commission has been cracking down on cryptocurrency exchanges... This is EDX Markets making room for Citadel's cryptocurrency trading platform.

The Investor's Podcast host Preston Pysh (@PrestonPysh): "Sorry, but after watching, Blackrock, Fidelity, Citadel, Schwab, and now Deutsche Bank have all applied for Bitcoin ETFs, spot exchanges, etc., just days after the SEC issued a TRO against Binance and sued Coinbase. How can you not think that the past year has been a huge internal effort of coordination between Wall Street parasites and government regulatory agencies so that they can catch up..."

Sam Bankman-Fried's FTX collapsed in November, before which its affiliated cryptocurrency trading company, Alameda Research, used billions of dollars worth of customer assets to fund risky trades and venture capital investments.

FTX bankruptcy, Coinbase and Binance lawsuits precede, in order to avoid confrontation with regulators, EDX Markets is very smart to choose to serve institutional clients, providing API-based trading access rather than traditional front-end user interfaces. At the same time, EDX Markets does not directly custody client funds, but manages client funds through third-party banks and professional custody service providers. The transfer of funds does not "pass through" EDX Markets, but only between relevant service providers. Currently, the four cryptocurrencies offered by EDX Markets (BTC, ETH, LTC, and BCH) have not been recognized by the SEC as securities.

As an unmanaged trading platform, EDX Markets does not directly handle customers' digital assets or directly serve individual investors. Instead, it expects retail brokers to send orders for investors to buy and sell digital currencies to its market.

According to the information displayed on the EDX Markets official website, we can see that EDX does not provide direct retail accounts, nor does it allow individuals to join as members. Only institutions have the qualification to apply for EDX membership. This is similar to the operation mode of the stock market, where investors do not directly enter the New York Stock Exchange or NASDAQ, but submit orders through brokerage firms such as Fidelity and Charles Schwab, further integrating individual cryptocurrency investors into the management portal of traditional financial intermediaries.

LumidaWealth CEO Ram Ahluwalia (@ramahluwalia) believes that EDX may want to develop into a regulated ATS and eventually become a "national securities exchange" (think Nasdaq or NYSE), which would be beneficial for the cryptocurrency market. EDX is applying federal securities laws to cryptocurrencies and by utilizing third-party banks and cryptocurrency custodians for asset custody, EDX minimizes conflicts of interest and prevents asset misuse, as we have seen in issues with FTX, Celsius, and DCG/Genesis.

According to the SEC lawsuit, Binance's trading volume surged to $9.58 trillion by 2021, and Binance.US's revenue exceeded $265 million in 2021. By trading volume, Binance is the world's largest cryptocurrency exchange, and most of its revenue comes from trading fees. CryptoQuant, a cryptocurrency data analysis tool, also tweeted that Binance's revenue has grown tenfold in the past two years, and is expected to reach approximately $12 billion in 2022. OKX's revenue has also grown fourfold in the past two years.

天下熙熙，皆为利来；天下攘攘，皆为利往。作为加密行业最赚钱的生意，交易所天生就带着瞩目的吸引力。一边是监管死咬着不放口，一边是华尔街清退原生加密军团，进攻加密交易所。加密行业 Native 将迎来前所未有的压力。

The world is bustling with people seeking profit; the world is bustling with people seeking opportunities. As the most profitable business in the cryptocurrency industry, exchanges naturally carry a remarkable appeal. On one hand, regulators are tightening their grip; on the other hand, Wall Street is pushing out native cryptocurrency groups and attacking cryptocurrency exchanges. The native cryptocurrency industry will face unprecedented pressure.

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