Nasdaq to Launch Crypto Custody Service for Institutional Investors

Nasdaq has announced a new business, Nasdaq Digital Assets, which will promote institutional participation in digital assets, a press release said Tuesday (Sept. 20).

This will provide “trusted and institutional-grade solutions” which will focus on custody, liquidity and integrity.

Nasdaq Digital Assets will begin by developing a cryptocurrency custody solution that will bring together the “best attributes of hot and cold crypto wallets” and will offer accessibility, scalability and security. The custody service, providing liquidity and execution services for financial institutions, is subject to regulatory approval.

To combat the rising financial crime in digital assets, Nasdaq has expanding its crimefighting capabilities into the crypto space. Its Verafin and Surveillance products provide anti-money laundering and fraud detection to both digital and fiat assets.

Nasdaq Digital Assets will be led by Ira Auerbach, the senior vice president and head of digital assets. Auerbach previously was Global Head of Gemini Prime, the crypto platform brokerage service.

“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,” said Adena Friedman, president and chief executive officer of Nasdaq.

Friedman added that the digital asset technology could transform markets over the long-term.

This comes in spite of the rough summer the crypto market has had for mergers and SPAC acquisitions, with many of them falling apart in recent months.

Read more: Market Volatility, Souring SPAC Outlook Create Cruel Summer for Crypto M&A

PYMNTS wrote that there had been five deals for crypto firms to go public with SPACs that collapsed between July and August. It followed the general trend of crypto prices being down for months. Bitcoin’s price was down around 65% from its high from last November, and in July, stumbled below the $20,000 line.

Firms that are already public also saw worsening results — the highest-profile firm, Coinbase Global, saw its stock price plummet, falling 64% in the second quarter alone while trading activity fell drastically.

In addition, the acquisition of crypto custody firm BitGo by Galaxy Digital, which fell apart, saw more turmoil in August as the seller filed a lawsuit demanding a $100 million breakup fee.

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