NASDAQ Works With 7 Crypto Exchanges But Has Publicized Gemini And SBI Virtual Currency Dealings

NASDAQ Is Working With 7 Crypto Exchanges But Has Publicized Only 2

In 2017, there were many inexperienced traders in the market who got in just because of fear-of-missing-out. After the first major crash, mostly the experienced players stayed. Many prominent financial institutions, including NASDAQ was one of them.

In November 2018, NASDAQ released a blog making a case for cryptocurrency surveillance which read:

“Cryptocurrencies aren't just a buzzy new trend — they represent a powerful technology that promises to revolutionize the way people think about financial technology and the use and handling of currency. One of the most attractive features of cryptocurrencies is privacy, but that has led to cases of abuse and manipulation. Nasdaq, meanwhile, has spent decades creating solutions for the monitoring of stocks, currencies, securities, and other markets — in short, the very tools needed to fight the problems that cryptos are facing. In fact, Nasdaq already licenses its market-surveillance technology to Gemini, a crypto market founded by the Winklevoss twins.”

However, to use their proprietary surveillance technology not only do exchanges require money, but they also need much more. Nasdaq has a crew of about 20 people that act on due diligence processes for crypto exchanges guaranteeing that they comply with stringent reporting and security measures. Apparently, only 7 exchanges have been able to pass through but NASDAQ has publicized the name of only 2, Gemini and SBI Virtual Currency.

How Can An Exchange Get On-Board?

The selection process can be broken down into 3 categories: Business Model, KYC/AML, and Exchange Governance & Controls.

  • Business Model: The team determines the substance of crypto assets to use such as to understand whether it has been used to buy drugs in past. It is basically the test for reputability.
  • KYC/AML: This step is concerned with the organizational structure and the owner’s background in terms of technical and financial market knowledge. The team carries out their own KYC procedures on the exchanges and work only with the companies that have proved themselves although they are willing to work with unusual clients.
  • Exchange Governance and Control: In the final step, the key question that the exchange asks is “Are crypto asset listing standards in place?” Many exchanges are vague and opaque about their listings, while others like Coinbase are transparent.

Nasdaq’s head of exchange and regulator surveillance team, Tony Sio said:

“The objective that we’re trying to work with crypto, is we see this as a growing asset class. So we’re working to help provide our technology, it could be around matching, it could be around surveillance, to help our customers as they grow their marketplaces.”

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