Nasdaq Forms Digital Assets Business
Posted by Colin Lambert. Last updated: September 21, 2022
Exchange operator Nasdaq has announced the launch, subject to regulatory approval of Nasdaq Digital Assets, a new business that the firm says underpins its ambition to advance and help facilitate broader institutional participation in digital assets.
The new venture will initially develop an advanced custody solution that will incorporate liquidity and execution services to address industry challenges around connectivity, availability, and efficiency. The custody solution will bring together the attributes of hot and cold crypto wallets through a technology offering, which will, Nasdaq says, provide a high degree of accessibility and scalability without compromising security.
The new digital assets business will be led by Ira Auerbach, who recently joined the firm as senior vice president, head of digital assets, and who will oversee the team’s strategic roadmap, growth targets, and product development. Auerbach joined Nasdaq from Gemini in July, where he held several executive positions across product, business development, and trading. Most recently he was the global head of Gemini Prime, the crypto platform’s prime brokerage services, prior to which he spent six years in FX trading roles at BGC and BNP Paribas. At Nasdaq, he reports to Tal Cohen, executive vice president, North American markets.
“Nasdaq Digital Assets builds upon the successful solutions we have introduced in recent years to serve the digital assets ecosystem, including marketplace technology for digital asset exchanges, crypto-native anti-financial crime offerings, and crypto-related index solutions for tradable products,” says Adena Friedman, president and CEO of Nasdaq. “The technology that underpins the digital asset ecosystem has the potential to transform markets over the long-term. To deliver on that opportunity, our focus will be to provide institutional-grade solutions that bring greater liquidity, integrity, and transparency to support the evolution.”
Chen adds, “Demand among institutional investors for engaging in digital assets has increased in recent years, and Nasdaq is well-positioned to accelerate broader adoption and drive sustainable growth. With our trusted brand and strong track record as a technology provider for the global capital markets, Nasdaq is uniquely placed to address industry pain points by improving liquidity, scalability, and resiliency, with the goal to engender greater trust and confidence in the digital assets ecosystem.
Alongside the launch of the new business, Nasdaq says it is expanding its anti-financial crime technology to digital assets. The exchange says the integrity of the digital landscape is key to realising the full potential of digital assets, but point out that cryptocurrency-based money laundering activity reached $8.6 billion in 2021, a 30% increase from 2020.
“To play a central role in combatting the rising threat of financial crime across the digital assets financial landscape, Nasdaq has expanded its anti-financial crime technology with new capabilities and coverage for the cryptocurrency ecosystem,” the firm says.
Through its Verafin and Surveillance product offerings, Nasdaq has launched a suite of crypto-specific detection capabilities to effectively mitigate risks and provide continuous monitoring of anti-money laundering, fraud detection, and market abuse across traditional and digital assets, fiat and crypto, and on- and off-chain activities.
“Our expanded suite of anti-financial crime solutions reinforces our commitment to protecting the integrity of the financial system,” says Jamie King, executive vice president, head of anti-financial crime at Nasdaq. “As the world of digital assets evolves and converges with traditional finance, it is crucial to provide the necessary portfolio of technology solutions designed to safeguard participants across the financial ecosystem.”