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0 CommentsEquity exchange Nasdaq plans to become an institutional crypto custody service taking on established crypto players like Coinbase. This move is in line with its broader mission to be a crypto service provider rather than facilitate crypto trading.
Nasdaq, which operates markets in the US and global equities, is not a newcomer to the crypto market, having served as a provider of market surveillance technology to crypto exchange venues since 2018. In February 2021, the exchange announced the Hashdex Nasdaq Crypto Index ETF based on its own index.
Previously, the firm has opted to provide technology to crypto market participants versus operating a market itself, competing with Coinbase and FTX. According to a source, the new offering is pending regulatory approval. The firm is also establishing a new crypto-focused division, Nasdaq Digital Assets, in tandem with its move into crypto custody.
Later, Nasdaq said in a press release the unit’s launch “underpins Nasdaq’s ambition to advance and help facilitate broader institutional participation in digital assets by providing trusted and institutional-grade solutions focused on enhanced custody, liquidity, and integrity.”
“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,” Adena Friedman, Nasdaq CEO, said in a statement.
Ira Auerbach, a senior vice president, who joined Nasdaq from Gemini, will lead the new unit.
Institutional custody is a lucrative but competitive market in the crypto space, with providers fetching multi-billion dollar valuations. Crypto wallet and custody provider Ledger hit a $1.5 billion valuation in June 2021, while another crypto custody firm Anchorage secured a $350 million funding round at a $3 billion valuation in December 2021.
