Nasdaq Halts Plan To Launch Crypto-Custodian Business in US

Nasdaq became the latest mainstream financial firm to take a step back from digital assets, aborting its launch of a custodian business in the US due to the shifting business and regulatory environment. From a report: The exchange operator is also halting its efforts to pursue a license related to the business but will continue to build out its technology to handle crypto for clients. “We remain committed to supporting the evolution of the digital asset ecosystem in a variety of ways,” including partnerships with potential ETF issuers, Adena Friedman, Nasdaq’s chief executive officer, said on the second-quarter earnings call on Wednesday.

Nasdaq pulled back amid a widening crackdown by regulators that aims to isolate crypto’s risks from the US financial system. Banks have been warned about their exposure to crypto businesses, and the US Securities and Exchange Commission has filed a series of lawsuits against some of the industry’s biggest firms, including Binance and Coinbase Global. Among the concerns are risks that could topple a federally insured bank, as well as the failure of some crypto platforms to separate different parts of their businesses, such as custody, market-making and trading, which could result in conflicts of interests.