Nasdaq thinks its tech can police crypto exchanges

Nasdaq seems to be eying a move deeper into cryptocurrency markets, by offering its markets policing know-how to selected crypto exchanges.

Nasdaq, the international markets maker, is apparently looking to increase the use of the tools it has created to police its existing financial and securities markets in the crypto exchange business.

Citing a what seems to be an internal research paper created by the company’s staff, Bloomberg is reporting that the company believes it can apply the tools it has to detect fraud and unusual trading to eradicate some of the controversial practices that allegedly blight the cryptocurrency world.

In a direct quote from the document, the report says Nasdaq that, because “Regulators, brokers and exchanges have surveillance teams that monitor activity constantly and advanced technologies to help capture and analyze abusive behaviors including pump-and-dump schemes, insider trading, wash trading as well as spoofing and layering,” its technologies are a good fit for the sector.

Indeed, Nasdaq already applies its technology for one crypto market, Gemini. However, according to Tony Sio, Nasdaq’s head of exchange and regulator surveillance, despite getting approaches every couple of weeks, the company won’t work with all of the firms looking to apply its services, “since a lot of them are quite early stage or not reputable yet.”

Earlier in the week, Nasdaq announced a new partnership with Microsoft to integrate Azure-based blockchain services into its modular Financial Framework systems, that are used to run various financial markets across the globe. That partnership was designed to ease integration of various disparate system using a blockchain-based microservices suite to execute transactions and contracts, recording all such interactions in its ledgers.

If the gist of the Bloomberg report is correct, however, this represents another example of Nasdaq’s increasing interest in bringing the best-known implementation of its brand – as the custodian of a headline securities market – to the crypto space. It has consistently been pro-crypto in its outlook over the last year, and has already made some tentative moves in to the space in recent months providing the back-end technology for the Europe-based DX.Exhcange, amid persistent rumours that it will begin to list cryptos itself, in some form, during 2019.