The U.S. exchange Nasdaq is taking its first steps into crypto services with a focus on security, going into market with its own product for bitcoin and ether that targets institutional investors.
Finding cryptocurrency security solutions is a key challenge, not just for Nasdaq, but for the industry as a whole. It requires customer confidence in digital asset custodians, which is largely absent from some investors who are skeptical of the cryptocurrency assurance process. Wariness has spawned the winged expression "not your keys, not your crypto." "Keys" refer to an analogue of accounts’ passwords where digital assets are stored. Meanwhile, any intermediaries are involved in key keeping.
Along with the storage service, Nasdaq is improving its financial crime technology to reduce money laundering, fraud, and abuse in the digital asset market. Nasdaq's key advantage is the exchange being able to analyze the actions of potential abusers in both traditional and cryptocurrency markets.
As Valerie Banner-Turner, Nasdaq's senior vice president of financial crime technology, said, all the knowledge the exchange has gained, will advance the world of crypto. "Financial crime is not much different now than it was before. Money laundering is still money laundering, but at the moment only effective mechanisms are needed for carrying that out."
Nasdaq's entry into the digital asset sector comes as other players, including Blackrock and Fidelity, are building support for cryptocurrency. In August, Blackrock partnered with Coinbase. The offer included a private trust providing access to bitcoins for institutional clients.