Nasdaq Launched Vetting Process for Bitcoin Trading, Seven Crypto Exchanges on Board

According to Forbes news, Nasdaq, the world's second-largest stock exchange, has launched a vetting process for bitcoin exchanges which is expected to work as surveillance tools to combat wash trading and other forms of market manipulation. The stock exchange operator says seven crypto exchanges are on board.

The surveillance technology is known as SMARTS market surveillance system, which is a cross-market, cross-asset monitoring tool that associates both real-time and historical data with detection patterns to track illegal market activities, such as wash trading, etc.

Tony Sio, the Exchange and Regulator Surveillance chief of Nasdaq, explains that the process involves three main areas: business models, KYC/AML protocols and exchange governance and control. He added: “Historically, we don’t do such a large vetting process for our clients because they are much more well-known. But as we started working with less well-known names, startups, then we realized we needed to do this check process.”

According to Forbes, a 20-person team conducted the due-diligence process to ensure each applicant is capable to use the technology.

As early as July 2018, it was reported that SBI Virtual Currency and Gemini, as well as three other unnamed exchanges, had passed the process, which means Nasdaq has now added two new client platforms.

Indeed, market manipulation is a contentious issue in the cryptocurrency industry and is often cited as one of the biggest reasons why bitcoin ETF has not yet been approved.

According to a 2018 report by Blockchain Transparency Institute (BTI), more than 70% of the top 100 cryptocurrency exchanges listed in CoinMarketCap involve wash trading.

In November, 2018, Nasdaq announced to partner with VanEck, a U.S. investment firm, to launch a range of regulated digital asset products that will be used in the SMARTS system.

President of Nasdaq and CEO Adena Friedman said that she believes the crypto industry will play an important role in the future of global economy, calling “the invention itself [as] a tremendous demonstration of genius and creativity.”

Image: pexels.com

Author: Max Li

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