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  • The exchange has applied to the NYDFS to be granted a limited-purpose charter for the custodial service.
  • Nasdaq is seeking to bridge the gap left by the collapsed crypto firms.

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Stock market exchange operator Nasdaq has announced plans for crypto trading services by the close of next quarter.

According to the information shared with Bloomberg, the firm’s senior vice president and head of digital assets, Ira Auerbach, said the company is working on the necessary infrastructure and regulatory approvals before the launch.

Nasdaq has applied to the New York Department of Financial Services (NYDFS) for a limited trust charter for the service. The New York city-based exchange, ranked the second-largest US stock market operator, announced an entry into the crypto custody services in September last year, specifically tailored to institutional clients.

‘‘Demand among institutional investors for engaging in digital assets has increased in recent years, and Nasdaq is well-positioned to accelerate broader adoption and drive sustainable growth,’’ Tal Cohen, head of North American markets at Nasdaq, said during an interview in Paris.

Bridging the gap left by collapsing crypto firms

That sustainability has been elusive to institutional investors due to the recent market volatility that pushed several companies, including FTX, to bankruptcy. According to a report by the Financial Times, many hedge funds have their money stuck in the collapsed lender.

A bankruptcy filing by the Bahamas-based exchange, which went under in November last year, then valued at $32 billion, showed that the firm owed its top 50 largest investors more than $3 billion. One of the most affected is hedge fund Galois, reported to have lost about half of its capital in the exchange. Other companies are BlockFi and Genesis Trading, which have since sought bankruptcy protection.

Nasdaq is now seeking to bridge the gap left by some of the collapsed crypto firms, with some of the services including the safe keeping of bitcoin and ether and executions of transitions from financial institutions, says Auerbach. Nasdaq joins a growing list of traditional financial institutions offering crypto custody services.

BNY Mellon and Fidelity are the other firms offering bitcoin safekeeping. Other services tradFis are pivoting to include the tokenization of financial instruments like bonds to benefit from the advantages of blockchain technology.

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