Business 16 October 2018Erik Gibbs
NASDAQ could launch regulated crypto platform: report
This past June, NASDAQ CEO Adena Friedman warned about the issues associated with initial coin offerings (ICO). She was referring to the inherent risks associated with the offerings, which have not been forced to adhere to any set regulations. However, the exchange might be prepared to support a different type of ICO, one that is regulated by financial authorities.
According to a report in The Block, the exchange is considering introducing a platform that will allow firms to offer security token offerings (STO). An STO is similar to an ICO, but differs in that all STOs are regulated by authorities. STOs must be registered with the Securities and Exchange Commission (SEC) in the U.S. and are considered tradeable assets issued against future profits.
An unidentified source told The Block that the exchange has been in touch with blockchain and cryptocurrency firms, such as the blockchain startup Symbiont, to implement the platform. Through the platform, NASDAQ would issue tokenized securities and offer an STO trading solution.
NASDAQ isn’t the first entity to consider getting into the STO side of the equation. CoinList, which provides STO services to fintech companies, and Overstock’s tZero are already involved, and angel investment portal AngelList also has an arm dedicated to STOs.
With Friedman at the helm, NASDAQ has been more open than most toward cryptocurrencies. She told CNBC this past April, “Certainly Nasdaq would consider becoming a crypto exchange over time. If we do look at it and say ‘it’s time, people are ready for a more regulated market,’ for something that provides a fair experience for investors.”
At the end of July, the exchange reportedly held meetings in Chicago with several cryptocurrency exchanges. The meeting was allegedly designed to study how to advance cryptocurrency industry and increase awareness on a global scale.
NASDAQ is also reportedly looking to add additional support to its Analytics Hub, a platform that offers information on the buy side of trades and which includes data that is used by investors to make trading decisions. The new tools to be added to Analytics Hub would be designed specifically for the cryptocurrency market.
Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.
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