Nasdaq halts plans to custody crypto citing regulatory concerns

Quick Take

  • Nasdaq is no longer pursuing its plans for a crypto custody service due to a “shifting business and regulatory environment,” CEO Adena Freidman said during an earnings call. 

Nasdaq is no longer pursuing plans for a crypto custody service, citing business and regulatory concerns, CEO Adena Friedman said in an earnings call on Wednesday.

This quarter, considering the shifting business and regulatory environment in the U.S., we have made the decision to halt our launch of the U.S. digital assets custodian business and our related efforts to pursue relevant license,” Friedman said. 

The exchange operator had been awaiting approval from the New York Department of Financial Services by the end of June to begin offering custody services to clients. Nasdaq announced its intention to move into the space following the collapse of Three Arrows last July and had forged forward, despite a slump in the crypto market. 

ETF front

Friedman said the exchange plants to keep building out technology to “position Nasdaq as a leading digital assets software solutions provider to the broader global industry."

Nasdaq partnered with BlackRock for a spot bitcoin ETF that's currently awaiting approval from the Securities and Exchange Commission. The SEC has yet to greenlight such a product, previously citing concerns of fraud and manipulation. 

“More broadly, we remain committed to supporting the evolution of the digital assets ecosystem in a variety of ways, among them, through our ongoing engagement with regulators, the delivery of comprehensive technology solutions across the trade life cycle, and through our partnerships with potential ETF issuers to support tradable exchange listed products,” Friedman said. 


© 2024 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Sarah is a reporter at The Block covering policy, regulation and legal happenings. Before, Sarah was a reporter with CQ Legal writing about securities regulation, which is where she first started reporting on crypto. Sarah has also written for The Bond Buyer and American Banker, among other finance-related publications. She graduated from the University of Missouri and earned a degree in print and digital journalism. Sarah is based in Washington D.C., and is an avid coffee lover. You can follow her on Twitter @ForTheWynn.

Editor

To contact the editor of this story:
Nathan Crooks at
[email protected]