NASDAQ Starts Working With Crypto Exchanges
NASDAQ’s proprietary surveillance technology is being made available to cryptocurrency exchanges. A 20 person team is contributing to provide better security for identifying fraudulent transaction patterns to help curb the incidents of fraud.
The eligible exchanges will be granted access to Nasdaq’s surveillance technology. It is used by the financial giant to verify clients based on trading volume. The software is designed to be free from manipulation and fraud.
At the time of writing this news, seven cryptocurrency exchanges have passed the test so far. A Nasdaq representative spoke with Forbes, naming only two of the selected exchanges, Gemini and SBI Virtual Currency. Notably, Nasdaq’s technology is already utilized for attraction institutional investors and traders that are used to mainstream venues.
Tony Sio, Head of exchange and regulator surveillance, Nasdaq discussed the queries that every cryptocurrency exchange should address. He said
“Historically, we don’t do such a large vetting process for our clients because they are much more well-known. But as we started working with less well-known names, startups, then we realized we needed to do this check process.”
A detailed overview was presented on how the company categorizes it’s cryptocurrency exchange clients under three headings
- Business Model
- Exchange Governance and Controls
This shows that Nasdaq is concerned about the who is using the crypto assets and how are these assets used.
Although the New York Stock Exchange has already partnered with Microsoft and Starbucks to launch its own crypto exchange called Bakkt, the exchange guidelines proposed by the Nasdaq is currently limited to providing technical support at present.
Tony Sio further commented
“The objective that we’re trying to work with crypto, is we see this as a growing asset class. So we’re working to help provide our technology- it could be around matching, it could be around surveillance- to help our customers as they grow their marketplace.”