Currently, millions of dollars invested in crypto are lost due to fraud on a daily basis.
The Wall Street Journal reported that only hacks had cost the industry more than $1 billion, so anti-fraud systems and technologies are a must these days.
NASDAQ is working with seven crypto exchanges
NASDAQ is working with seven crypto exchanges at the moment to support their security and tech functionalities and to help create an ecosystem for institutional investors.
Institutional investors in crypto are one of the main ingredients that are missing before mainstream adoption can be eventually achieved.
According to more experts, the other essential ingredient is more clarity and regulation coming from the SEC and other significant institutions.
Forbes just reported that only two of the seven exchanges that we have mentioned above Gemini and SBI Virtual Currency had been publicized.
Crypto exchanges that are planning to use NASDAQ’s fraud surveillance tech are expected to undergo massive due diligence reviews.
An intense check project is required
The exchanges that will pass the assessment will be granted access to the proprietary tech that NASDAQ is currently using to monitor traditional stock trading volumes for fraud.
“Historically, we don’t do such a large vetting process for our clients because they are much more well-known. As we started working with less well-known names, startups, then we realized we needed to do this check process,” NASDAQ’s head of exchange and surveillance Tony Sio said.
The NASDAQ checklist is called “Key Questions to Ask When Evaluating a Cryptocurrency Exchange” and it is used to assess potential clients.
The document includes three sections: business model, KYC/AML, exchange governance, and controls.
It brings questions involving the products’ reputation, the founders’ background and more.
Gemini teamed up with NASDAQ last year
It’s important to note that back in 2018 Gemini founders, the Winklevoss twins, have hired NASDAQ to conduct market surveillance for BTC and ETH trading on Gemini.
They describe NASDAQ’s SMARTS Market Surveillance tech as a vital component that can bring more legitimacy to the crypto space.