Nasdaq, the second-biggest stock exchange in the world, is currently cooperating with seven cryptocurrency exchanges, Forbes reports.
The news came as a surprise as the previous understanding was that the number is lower. The stock exchange representative, who talked to Forbes’s reporter, mentioned only two exchanges by name – Gemini and SBI Virtual Currency.
In order to get to use the latest Nasdaq technology, the interested parties, (exchanges), need to have more than deep pockets only. A test has to be passed in the first place to ensure the customer is technically capable of using the Nasdaq software.
“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,” said Tony Seo, head of exchange and regulator surveillance at Nasdaq.
The software is built around the latest technology, which is focused on identifying and flagging potential fraud and manipulation actions and attempts.
The process to prepare for the test and to ultimately use Nasdaq’s technology is lengthy and diligent. Forbes reports that around 20 people contribute in different ways in this process.
According to Seo, there are three major elements of the vetting process – Business Model, KYC/AML, and Exchange Governance amp; Controls.
The first element focuses on the business itself and how well the exchange knows products and customers. The second part – KYC (Know Your Customer) and AML (Anti-money laundering) – have become the minimum standards in the cryptocurrency exchange industry.
The final part is focused on the listing policy of the exchange.
“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 mdash;it could be around matching, it could be around surveillance mdash; to help our customers as they grow their marketplaces,” concludes Sio.
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