During an earnings call, Nasdaq (NDAQ) CEO Adena Friedman announced the company’s decision to abandon its plans for a crypto custody service, which was originally scheduled to launch in the second quarter of the year.
Earlier, Nasdaq had been working on establishing the necessary infrastructure and obtaining regulatory approval, including applying for a limited-purpose trust company license from the New York Department of Financial Services (NYDFS) to oversee the custody business.
Do check out: Understanding Crypto Market Orders
However, considering the evolving business and regulatory landscape in the United States, Nasdaq has chosen to halt these plans and pursue other avenues of supporting the digital asset industry. Despite this setback, the company intends to continue its involvement in the sector through partnerships with potential ETF issuers.
Nasdaq’s decision reflects the challenges faced by crypto firms in the U.S., as regulators focus their attention on the industry, sparking concerns about potential relocations to more favorable jurisdictions.
In September of last year, Nasdaq made public its intentions to provide custody services for Bitcoin and Ether, specifically targeting institutional investors. The company had aimed to secure approval from the New York Department of Financial Services and launch the service by the end of the second quarter.
This move was regarded as an indication of increased involvement by Wall Street institutions in the digital asset sector. Additionally, Nasdaq recently formed a partnership with BlackRock Inc. to jointly apply for an exchange-traded fund (ETF) that directly invests in Bitcoin.