Nasdaq postpones crypto custody plans, citing ‘shifting business and regulatory environment’ Nasdaq postpones crypto custody plans, citing ‘shifting business and regulatory environment’
Nasdaq CEO Adena Friedman said the exchange remains committed to the digital assets industry but will not pursue a relevant operational license until there is more clarity.
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Updated: Jul. 24, 2023 at 6:10 pm UTC
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New York-based Nasdaq Stock Exchange has decided to delay the launch of its crypto custody service due to the uncertain regulatory environment in the U.S.
Nasdaq CEO Adena Friedman, during the company’s quarterly earnings call on Jul. 19, 2023, said:
“Considering the shifting business and regulatory environment in the U.S., we’ve made the decision to halt our launch of the U.S. digital assets custodian business.”
According to Friedman, the exchange remains committed to the digital assets industry but will not pursue a relevant operational license until there is more clarity. She added that Nasdaq will continue developing solutions for the industry in the meantime.
Friedman also clarified that the decision to delay the launch of the custody service is unrelated to the ongoing process for a spot Bitcoin exchange-traded fund, which will be supported by the exchange.
Friedman said:
“We remain committed to supporting the evolution of the digital asset ecosystem in a variety of ways, among them through our ongoing engagement with regulators, the delivery of comprehensive technology solutions across the trade lifecycle and through our partnerships with potential ETF issuers to support tradable exchange listed products.”
Nasdaq is acting as BlackRock’s partner for the latter’s spot Bitcoin ETF.
Shifting regulatory environment
The exchange first announced plans for a digital assets custody business in Nov. 2022, and the service was set to launch by the end of the second quarter before the decision in March 2023 to delay the launch.
However, the ensuing weeks since then have seen the U.S. regulatory landscape deteriorate and become more complex to navigate as the SEC ramped up enforcement against the crypto industry with legal complaints against Coinbase and Binance.US.
The SEC has adopted a hard stance that most cryptocurrencies are securities and is using this as a key prong in its enforcement strategy. However, the issue has yet to be determined with finality by lawmakers which has become the central pain point in many of the legal cases with crypto firms.
Many cryptocurrency firms have decided to focus on growth outside the U.S. until lawmakers and regulators can establish more certainty for the industry.
Meanwhile, there is some optimism for the industry in the U.S., as Congress is set to vote on crypt-related legislation this week. The outcome could be a crucial step in clarifying the regulatory landscape for the industry.
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Posted In: Exchanges
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Assad Jafri
AJ, a passionate journalist since Yemen's 2011 Arab Spring, has honed his skills worldwide for over a decade. Specializing in financial journalism, he now focuses on crypto reporting.
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Jacob Oliver
Jacob Oliver is a recovering academic and English teacher turned crypto journalist and web3 writer. He holds a Ph.D. from the University of Washington.
In this article
Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Nasdaq
NASDAQ, which stands for the National Association of Securities Dealers Automated Quotations, is an American stock exchange based in New York City and one of the largest electronic stock markets in the world.
Coinbase
Coinbase is a digital currency exchange and wallet service that allows individuals to buy, sell, and store digital currencies, such as Bitcoin, Ethereum, and Litecoin.
Adena Friedman was appointed President and Chief Executive Officer of Nasdaq on January 1, 2017, and she now serves as Chair of the Board of Directors. Prior to being named CEO, Adena worked as President and Chief Operating Officer for the company in 2016, supervising all business sectors with a focus on driving efficiency, product creation, […].