In a striking move due to recent regulatory complications, Nasdaq terminated plans to roll out a cryptocurrency custody service, as stated by the company’s CEO, Adena Friedman. The altering state of the business and regulatory atmosphere in the U.S stirred this decision. This decision might be discouraging, given the intense efforts Nasdaq had put into shaping the necessary infrastructure and securing regulatory consent for this service.
They had even submitted an application to the NYDFS for a limited-purpose trust company that would supervise the custody business. Furthermore, the crypto community keenly anticipated Nasdaq’s crypto custody service. Launched to meet increasing institutional zeal for crypto services, the service was set to provide secure storage solutions, thereby shielding digital assets from theft or loss. Despite this, the CEO announced that Nasdaq will not entirely withdraw from the digital asset landscape. It will continue partnering with potential ETF issuers and supporting advancements in the digital asset ecosystem.
However, this decision distinctly mirrors the obstacles financial establishments confront while attempting to penetrate the cryptocurrency domain. Regulatory oversight from U.S regulatory bodies like the Securities and Exchange Commission and the Commodity Futures Trading Commission have intensified. This heightened scrutiny specifically targets crypto firms as seen in the recent lawsuits filed by the SEC against Binance, the largest global crypto exchange, and Coinbase, the top U.S.-based crypto exchange. The commission has also acted against crypto exchanges Kraken and Bittrex in this year.
These actions have led to criticisms to the SEC’s leadership. According to Congressman Ritchie Torres, the SEC has been slow in issuing rules on crypto assets or providing clear guidelines. On the contrary, the body has been issuing contradicting messages, further causing distress and uncertainty.
In essence, this pullback by Nasdaq is symptomatic of broader tension within the financial industry. As companies grapple to capitalize in the burgeoning crypto market, regulators are equally scrambling to rein in and manage an industry that is rapidly growing beyond the confines of conventional oversight. The question now is how and to what extent these regulations will influence the evolution of this budding market and other interested financial giants.
Source: Cryptonews
