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Despite the high-handed regulatory action in the United States, Nasdaq is optimistic about securing regulatory approval in the first half of 2023 for offering crypto custodial services.
The 52-year-old exchange operator Nasdaq has been recently eyeing a move in the crypto market and is working to offer crypto custodial as well as trading services to its clients. Currently, Nasdaq has been awaiting approval from the New York Department of Financial Services (NYDFS) by the end of June 2023 to start offering crypto custodial services to its clients.
Over the last year, Nasdaq has shown its intentions to enter the crypto space after the collapse of Three Arrows Capital in July 2022. It has continued to push ahead with its crypto ambitions even after major bankruptcies in the crypto space. However, Nasdaq has been waiting for some regulatory clarity to emerge in the crypto market of the US.
During his latest podcast interview, Matt Savarese, Nasdaq’s head of strategy for digital assets said:
“Trust had started to break down a little bit and they really needed that trusted player to come in. We are on the right path. Having that foundational aspect of custody was absolutely critical, and we see institutions, they’re not even backing away from the space, but they’re actually looking for players like us to say, great, they know how to deliver it. They’ve done it for 50 years. They’re innovative in a regulatory environment as well.”
Dealing with US Regulators
Over the past few months, ever since the collapse of the crypto exchange FTX, US authorities have been cracking down on crypto-related businesses. In fact, they have also asked banks to cut down any further cooperation with crypto firms.
Thus, it’s becoming increasingly difficult to get permission from US regulators to operate in the crypto sector. Also, the NYDFS has been particularly cracking down on crypto firms recently. Last month in February, NYDFS asked crypto infrastructure firm Paxos Standard to stop issuing the Binance USD (BUSD) stablecoin.
Also, the US regulators haven’t shied from going after big crypto firms. Last week, the US Securities and Exchange Commission (SEC) sent a Wells Notice to crypto exchange Coinbase notifying them of upcoming investigations into their several offerings.
However, despite this gloomy picture, Nasdaq chooses to be optimistic. In addition to the crypto custody services, Nasdaq is also planning to offer liquidity services. “The next step for us is execution and liquidity services. And then we build on our anti-financial crimes so we can monitor this throughout the ecosystem. “We are optimistic,” Savarese said.