Nasdaq cancels crypto holding plans amid US regulatory issues
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The company's CEO, Adena Friedman, said Nasdaq has abandoned its protected cryptostody service, a move prompted by the growing regulatory environment in the US.
This strategic decision, which marks a significant decline in the institutional acceptance of cryptocurrencies in the US, was revealed in an earnings call on Wednesday:
“Given the changing business and regulatory environment in the United States this quarter, we have decided to discontinue our efforts to acquire the US Digital Asset Custodian business and related license.”
Nasdaq has expressed interest in launching a certified crypto custody service amid pressure to gain regulatory approval and build the necessary infrastructure. The company sought to obtain a limited purpose trust company license from the New York Department of Financial Services (NYDFS) to manage its securities business.
However, in the face of an uncertain regulatory environment and scrutiny of crypto-related services, Nasdaq has chosen to rethink its involvement in this sphere.
This reversal could set a worrisome precedent for the digital asset industry, risking a shift of power to crypto companies that are more beneficial to their operations.
Therefore, Nasdaq, which has been subject to every type of regulation imaginable, does not feel confident that it can achieve regulatory clarity to operate a *CUSTODY* service in the US.
This tells you what a joke US regulatory transparency has been and its chilling effects.
— Adamscochran (@adamscochran.eth) (@adamscochran) July 19, 2023
Despite this unexpected retreat, Nasdaq's support for the digital asset sector will not disappear completely. Friedman said the company will continue to support the industry, citing its interest in partnering with potential ETF issuers:
“We will continue to build and deliver the technology capabilities that position Nasdaq as the leading digital assets software solutions provider to the broader global industry.”
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