NASDAQ, the second-largest stock exchange in the world, has disclosed that about seven crypto exchanges are applying its market surveillance technology on their platforms, reported Forbes on Jan.30.
The screening process for approval to use Nasdaq’s technology, dubbed the SMARTS Market Surveillance system, follows a stringent set of assessment criteria’s. They are broadly categorized into three parts – the company’s business model, their Know Your Customer and Anti-Money Laundering measures and Exchange Governance and Controls.
Nasdaq reportedly makes use of the same SMARTS tool that companies are vying for to verify its potential clientele.
The majority of the focus remains on these three criteria’s which help the stock exchange giant assess a company’s future potential risks and how transparent the platform tends to remain while listing new digital assets for trading.
SMARTS is a top of the line market asset surveillance instrument that helps firms to evaluate past and present data patterns, which can be used to fish out illegal activities or funds movements.
Nasdaq has so far revealed just two of its seven partner’s that have been able to cross its assessment threshold, namely, Gemini and SBI Virtual Currency.
The stock exchange has set up a team of 20 people, specifically tasked to identify whether the crypto exchanges have the technical capabilities and whether it has adequate moral inclination to make use of the sophisticated market analysis tool judiciously.
Nasdaq’s head of exchange and regulator surveillance, Tony Sio, reportedly told Forbes:
“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.”
Nasdaq has been, for quite some time now, involved in the blockchain world, investing $30 million in blockchain startup “Chain” back in 2015. More recently, it pumped $20 million, alongwith Citigroup and Galaxy Digital Holdings, into Symbiont, another blockchain startup.
Sio, in conclusion to his comments, said:
“The objective that we’re trying to work with crypto, is we see this as a growing asset class. So, we’re working to help provide our technology—it could be around matching, it could be around surveillance—to help our customers as they grow their marketplaces.”