Nasdaq Joins BlackRock in Institutional Crypto Push

The second largest U.S. stock exchange is launching a crypto custody service.

Reviewed by: Stephan Roth
Edited by: Stephan Roth

LONDON – Nasdaq, the second-largest US stock exchange, is launching a crypto custody service as it seeks to offer crypto exposure to its institutional clients. 

The 'Nasdaq Digital Assets' business will provide institutional investors with trusted and institutional-grade solutions focused on custody, liquidity and integrity, a statement from the Nasdaq said. 

Nasdaq Digital Assets will be led by Ira Auerbach senior vice president and head of digital assets who previously ran crypto exchange and brokerage services Gemini. 

"Demand among institutional investors for engaging in digital assets has increased in recent years and Nasdaq is well-positioned to accelerate broader adoption and drive sustainable growth," said Tal Cohen, Nasdaq's executive vice president and head of North American markets. 

Alongside the launch of Nasdaq Digital Assets, Nasdaq has expanded its anti/financial crime technology with new capabilities and coverage for cryptocurrencies. 

According to the Nasdaq, cryptocurrency-based money laundering activity reached $8.6bn in 2021, a 30 per cent increase from 2020. 

A large part of these stolen or laundered funds can be tracked to the $7bn laundered on Tornado Cash, a crypto mixer that anonymises the origin and identities of its funds and investors.

"Our expanded suite of anti-financial crime solutions reinforces our commitment to protecting the integrity of the financial system," said Jamie King, Nasdaq's executive vice president and head of anti-financial crime.

Nasdaq's decision to open and widen its doors to the crypto market comes amid a strong push by traditional financial institutions to offer clients crypto exposure. 

In asset manager abrdn purchased a stake in cryptocurrency exchange Archax. This followed BlackRock's decision to launch a bitcoin trust and partner with Coinbase

Despite the crypto market shaving off two-thirds of its market cap, institutional investors and major traditional financial firms have not been deterred to enter the space. 

Sui Chung, chief executive of CF Benchmarks calls Nasdaqs decision a "logical move". He adds: "It's one area where there is clarity from a legal and regulatory perspective, obviously very important for a firm like Nasdaq". 


[Editor’s note: This article originally appeared on ETF Stream]