Nasdaq Halts Plan for Crypto Custody Service Due to U.S. Regulatory Conditions

Nasdaq Halts Plan for Crypto Custody Service Due to U.S. Regulatory Conditions – During an earnings call on Wednesday, CEO Adena Friedman announced that Nasdaq (NDAQ) has decided to abandon its previously scheduled launch of a crypto custody service, originally planned for the second quarter of this year. 

In September 2022, the company had revealed its intentions to establish the required infrastructure and obtain regulatory approval for the custody service. Nasdaq had applied to the New York Department of Financial Services (NYDFS) to become a limited-purpose trust company responsible for overseeing the custody business.

- Advertisement -

However, the company has now chosen to halt these plans and withdraw its efforts in obtaining the necessary license. This decision comes as a response to the continuously changing business and regulatory landscape surrounding cryptocurrencies in the United States, according to Friedman.

People Also Read: Coinbase CEO to Meet House Democrats

Nasdaq, however, plans to continue its support for the digital asset industry through various means, as stated by CEO Adena Friedman. These measures include forming partnerships with potential ETF issuers and offering technology solutions for crypto custody. 

Notably, Nasdaq is the designated listing exchange partner for BlackRock’s spot bitcoin ETF application, which had a positive impact on the market when it was filed last month. Unfortunately, Nasdaq’s decision to drop its crypto custody service is seen as a setback for institutional adoption of cryptocurrencies in the U.S. 

The regulatory environment in the country seems to be targeting crypto firms and related services, leading to concerns that these companies might consider moving to more favorable jurisdictions. The U.S. Securities and Exchange Commission (SEC) has set a significant hurdle for publicly traded firms looking to enter the crypto custody space. 

People Also Read: Binance US Reacts to Bitcoin Cash FUD

In April 2022, the SEC staff issued Staff Accounting Bulletin No. 121, advising such firms that they would have to record their customers’ digital assets as liabilities on their own balance sheets. This has added complexity and challenges to the involvement of publicly traded companies in the crypto custody business.

- Advertisement -


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

More From Evoclique