Nasdaq’s SMARTS would supposedly enable a more manipulation-resistant marketplace.
In an announcement, Nasdaq says that Gemini—the cryptocurrency exchange founded by the Winklevoss Twins, will be using their SMARTS Market Surveillance technology for monitoring the marketplace. Gemini will also be using the tech for determining settlement prices for Bitcoin futures contracts on Cboe’s futures exchange (Gemini currently has an Information Sharing Agreement with Cboe).
Nasdaq’s SMARTS Market Surveillance, according to their website, is a solution that “correlates real-time and historical data with detection patterns to ensure early detection of unusual trading patterns that could be potential breaches of exchange trading rules and practices.” The technology focuses on detecting “manipulation techniques being used to gain a trading advantage.”
“Since launch, Gemini has aggressively pursued comprehensive compliance and surveillance programs, which we believe betters our exchange and the cryptocurrency industry as a whole,” says Gemini CEO Tyler Winklevoss. “Our deployment of Nasdaq’s SMARTS Market Surveillance will help ensure that Gemini is a rules-based marketplace for all market participants.”
In a release, Gemini expressed its anticipation over the partnership: “Our market surveillance team looks forward to using Nasdaq’s Alerts Development Environment and Alerts Management System to become a market leader in custom surveillance rule creation and alerting for the crypto-asset market. We believe that it is this advanced functionality combined with Nasdaq’s proven, rule-based approach to traditional financial market surveillance that will allow for the most thorough monitoring of the evolving crypto-asset marketplace, today and into the future.
Nasdaq says this new partnership is “a major milestone” for the firm and its SMARTS application, which is proving itself efficient for non-traditional marketplaces.
“Gemini has been a leading voice in advocating for stronger transparency and thoughtful regulation of the cryptocurrency markets – views we deeply share and have put into practice as a market operator and technology partner,” said Valerie Bannert-Thurner, Senior Vice President and Head of Risk & Surveillance Solutions, Nasdaq. “Being regulated by the New York State Department of Financial Services (NYSDFS), Gemini is held to the utmost standards in terms of capital reserve requirements. This is a major milestone in the application of SMARTS- and an important indicator of our commitment to expand the use of our market technology into non-traditional marketplaces, as well as new frontiers beyond the capital markets.”
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