Nasdaq Halts Plan for Crypto Custody Service Due to U.S. Regulatory Conditions
Nasdaq (NDAQ) is dropping its plans for a crypto custody service, which was slated to go live in the second quarter of this year, CEO Adena Friedman said in an earnings call on Wednesday.
In March, the operator of the Nasdaq stock exchange had said that it was putting together the infrastructure and regulatory approval needed for a crypto custody service. The firm had applied to the New York Department of Financial Services (NYDFS) for a limited-purpose trust company, which would oversee the custody business.
Now Nasdaq has opted to halt these plans and its effort to pursue the necessary license “considering the shifting business and regulatory environment in the U.S.,” Friedman said.
The firm will however aim to continue supporting the digital asset industry in several ways, including partnerships with potential ETF issuers, she added.
Nasdaq’s move is a blow to institutional adoption of crypto in the U.S., where regulators appear to be targeting crypto firms and related services, prompting concerns that there will be an exodus of such firms to more hospitable jurisdictions.
UPDATE (July 19, 13:25 UTC): Adds additional detail from Friedman’s comments and background information.
Edited by Parikshit Mishra and Nelson Wang.
