In an apparent bid to tap into the growing lure of high-net-worth individuals into the crypto space, Nasdaq Inc. NDAQ will offer custody services for Bitcoin BTC/USD and Ethereum ETH/USD to institutional investors.
According to Nasdaq senior vice president Tal Cohen, who is also head of North American markets, a new branch devoted to digital assets will offer custody services for Bitcoin and Ethereum to institutional investors.
The news comes on the heels of Nasdaq’s hiring Ira Auerbach, who oversaw prime broker services at crypto exchange Gemini. At Nasdaq, Auerbach will lead the new Nasdaq Digital Assets division, according to a Bloomberg report.
“We believe this next wave of the revolution is going to be driven by mass institutional adoption,” Auerbach said. “I can think of no better place to bring that trust and brand to the market than Nasdaq.”
Nasdaq will compete with cryptocurrency companies like Coinbase, Anchorage Digital, and BitGo if it becomes a custodian of digital assets. The New York Department of Financial Services must approve the move.
A limited number of financial institutions, including BNY Mellon and State Street, also provide cryptocurrency custody for institutions, despite the fact that a new Securities and Exchange Commission accounting rule has increased the capital requirements of keeping tokens on behalf of customers.
“Custody is foundational. Off the back of custody, we can start to develop other solutions, offer execution services, liquidity services, and think about how we support new markets,” Cohen said.
Auerbach, who will report to Cohen, says Nasdaq is also open to joint ventures with companies that specialize in cryptocurrencies.
To reach an employee strength of 40 by the end of the year, the team plans to grow internally and hire externally, he added.
Nasdaq Scales Up Tech
Through its Verafin and Surveillance products, which can assist in the investigation and reporting of instances of money laundering, fraud, and manipulation for banks and trading companies, Nasdaq has bolstered the technology it provides crypto companies related to protection and anti-crime software.
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