Nasdaq Scraps Crypto Plans Amid Regulatory Troubles

Nasdaq (NDAQ) has cancelled its plans to start a crypto custody service this year, said CEO Adena Friedman on Wednesday. The company was preparing the necessary infrastructure and regulatory approval for this service since September 2022.

But now, Nasdaq has stopped these plans due to changes in the business and regulatory environment in the U.S., Friedman explained. Nasdaq had applied to the New York Department of Financial Services for a license to manage the custody business.

Despite this, Nasdaq will continue supporting the digital asset industry in other ways. For example, it will partner with potential ETF issuers and provide technology for crypto custody. It's worth noting that Nasdaq is also involved in BlackRock's bitcoin ETF application.

This decision by Nasdaq is seen as a setback for the adoption of crypto by large companies in the U.S. It appears that regulators are targeting crypto companies and services, which has led to worries that these companies might leave for more friendly places.

Specifically, the U.S. Securities and Exchange Commission has set high standards for public companies to get involved in crypto custody. They have been advised that any obligations related to customers' digital assets must be recorded as liabilities on the companies' own balance sheets.