Nasdaq Delays Crypto Custody Until Regulatory Concerns Die Down

Crypto Breaking News

Jul 19

Exchange operator Nasdaq today said it was halting its plans to launch a digital assets custodian service, citing the current regulatory environment in the States.

But during its second-quarter earnings call Wednesday, Nasdaq CEO Adena Friedman said that the company would "remain committed to supporting the evolution of the digital asset ecosystem."

News dropped last year that Nasdaq was planning to launch its own crypto custody service to capture institutional investor interest. But this year, American regulators have launched their toughest crackdown on the industry yet—suing a number of major crypto brands.

"This quarter, 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 and our related efforts to pursue a relevant license," Friedman said.

She added that the company would continue to engage with regulators and partner with exchange-traded fund issuers working to release crypto products.

The U.S. is becoming a difficult place for the crypto industry to do business.

Wall Street's top regulator, U.S. Securities and Exchange Commission Chairman Gary Gensler, has cracked down on crypto exchanges, mainly because he alleges they have been selling unregistered securities.

Gensler even said regarding the industry: "We don't need more digital currency."

Though despite this, there does appear to be institutional interest in the space: BlackRock—and a number of other major asset managers—have applied for a spot Bitcoin ETF product.

Nasdaq has teamed up with BlackRock for the application, which is currently being reviewed by the SEC.

And a new crypto exchange aimed at big money investors, EDX Markets, launched last month. It's backed by major Wall Street firms Charles Schwab, Citadel Securities, and Fidelity Digital Assets.

Bitcoin, the biggest digital asset by market cap, which is today priced at $29,839, is also up 80% since the start of the year, when it was trading for less than $17,000 per coin.