The road to shaking its history of shady transactions and fraud is proving long for cryptocurrencies, but Nasdaq Inc. thinks it can help get the industry on the path to legitimacy.
It hosted a closed-door meeting earlier this week in Chicago with representatives from about half a dozen companies, including traditional exchanges as well as Gemini and other crypto markets, according to a person familiar with the event. The focus of the gathering, this person said, was to encourage the industry to do things that will improve its image and validate its potential role in global markets.
A Nasdaq spokesman declined to comment, but confirmed the event took place. Gemini didn’t respond to a request for comment.
Among topics discussed were the implications of future regulation for cryptocurrencies, what the necessary tools are and what surveillance will be needed. Nasdaq Chief Executive Officer Adena Friedman has been outspoken about the need for regulation, with her firm now partnering with a number of exchanges to do help on several of these issues. Earlier this year, for instance, Cameron and Tyler Winklevoss’s Gemini exchange hired Nasdaq to conduct market surveillance for Bitcoin and Ether trading as well as the auction that helps price Cboe Global Markets Inc.’s Bitcoin futures.
“I do believe that over time we’re going to find that there is really utility” in cryptocurrencies, Friedman said at a Bloomberg event in June. Nasdaq disclosed this week that it’s supplying technology to five crypto exchanges, including Gemini and SBI Virtual Currencies. It hasn’t named the other three.
This will not be the last meeting of this nature, the person said, adding that there will be an ongoing dialogue among the participants. Due to its history of illiquidity, theft, fraud and the lack of custody services, Wall Street has been slow to move into the space.
Earlier this year, for instance, Bloomberg reported that the Justice Department had opened a criminal probe into whether traders are manipulating the price of Bitcoin and other digital currencies.