Nasdaq CEO Adena Friedman said the exchange remains committed to the digital asset industry but will not seek a license to operate until there is more clarity.
New York-based Nasdaq stock exchange has decided to postpone the launch of its cryptocurrency custody service due to the uncertain regulatory environment in the United States.
Nasdaq CEO Adena Friedman said during the company’s quarterly earnings call on July 19, 2023:
“Given the changing business and regulatory environment in the U.S., we have decided to stop launching our U.S. digital asset custody business.”
Friedman said the exchange remains committed to the digital asset industry but will not seek a license to operate until there is more clarity. She added that Nasdaq will continue to develop solutions for the industry in the meantime.
Friedman also clarified that the decision to delay the launch of custody services has nothing to do with the ongoing process for a spot Bitcoin exchange-traded fund, which will be backed by the exchange.
Friedman said:
“We remain committed to supporting the growth of the digital asset ecosystem in a variety of ways, including through ongoing engagement with regulators, providing comprehensive technology solutions throughout the transaction lifecycle, and supporting tradable exchange-listed products by working with potential ETF issuers.”
Nasdaq is a partner in BlackRock’s spot Bitcoin ETF.
The changing regulatory landscape
The exchange first announced plans for a digital asset custody business in November 2022, with the service originally scheduled to launch at the end of the second quarter, before deciding to postpone the launch in March 2023.
However, in the weeks since, the U.S. regulatory environment has deteriorated and regulation has become more complicated as the SEC has stepped up its enforcement efforts against the cryptocurrency industry, filing legal actions against Coinbase and Binance.US.
The U.S. Securities and Exchange Commission has taken a hardline stance that most cryptocurrencies are securities, making it a key pillar of its enforcement strategy. However, the issue has yet to be finalized by lawmakers and has become a core pain point in many legal cases against cryptocurrency companies.
Many cryptocurrency companies have decided to focus on growth outside the United States until lawmakers and regulators can establish more certainty for the industry.
Meanwhile, there is some optimism in the industry in the United States as Congress is set to vote on cryptocurrency-related legislation this week. The outcome could be a key step in clarifying the regulatory landscape for the industry.
