Nasdaq Abandons Plans for Crypto Custody Service Due to Regulatory Uncertainty
Nasdaq CEO Adena Friedman announced that the company will abandon its plans for a cryptocurrency custody service due to regulatory uncertainty in the US. Friedman stated that Nasdaq prefers to operate in environments with a well-known regulatory underpinning and that the fundamental business opportunity has changed. However, she did mention that Nasdaq may revise its decision in the future if there is more clarity over regulation in the crypto sector.
Main Breakdowns:
- Nasdaq CEO Adena Friedman announced the company’s decision to abandon plans for a crypto custody service.
- Nasdaq cites regulatory uncertainty as the reason for the decision.
- Friedman mentions that Nasdaq prefers to operate in environments with a well-known regulatory underpinning.
- Nasdaq may reconsider its decision in the future if there is more clarity over regulation in the crypto sector.
- There are growing criticisms in the US of the SEC’s strategy of regulation by enforcement.
Nasdaq’s decision follows calls for the regulator to focus on providing greater clarity through a comprehensive regulatory framework, rather than relying solely on enforcement actions. The SEC’s recent enforcement actions against crypto firms, including Coinbase and Binance, have been criticized for stifling innovation in the industry and pushing companies to relocate to more crypto-friendly jurisdictions.
Hot Take:
Nasdaq’s decision to abandon its plans for a crypto custody service highlights the challenges posed by regulatory uncertainty in the US. While operating in a well-regulated environment is important for Nasdaq, it also raises concerns about the lack of a comprehensive regulatory framework for the crypto sector. This decision may hinder the growth and development of the industry in the US, pushing companies to seek more favorable jurisdictions.
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