Nasdaq Wants to Help Eradicate Fraud in the Crypto Market

On Nov. 1st, Stock exchange giant Nasdaq Inc. released a paper announcing the intent to use the anti-fraud tools it's developed for conventional exchanges to aid in stamping out crypto fraud.

How can #cryptocurrency exchanges foster transparency and implement processes and technology that contribute to fair and orderly trading and investor protection?

Nasdaq November 1, 2018.Lending Market Surveillance Tools to the CryptosphereThe goal, Nasdaq expresses the paper, is to integrate increased surveillance and regulation to cut down on the potential dangers of investment in cryptocurrency.

"Regulators, brokers and exchanges have surveillance teams that monitor activity constantly and advanced technologies to help capture and analyze abusive behaviors including pump-and-dump schemes, insider trading, wash trading as well as spoofing and layering."

Nasdaq points to the governments of Abu Dhabi and Singapore as an example of what successful crypto regulation frameworks are capable of achieving in the paper, calling for a unification of the "Fragmented" regulatory approach of America's crypto marketplace.

Crypto Companies ReceptiveAccording to Bloomberg, some crypto companies are already approaching Nasdaq.

To license their market surveillance software, called Nasdaq SMARTS, for use in digital exchanges.

The exchange claims its software can weed out bad actors through analysis of market data, combing through trades to try and determine a user's intent through machine learning.

Gemini already uses the software and the company has worked very closely with New York's regulators, including the hire of former New York Stock Exchange exec Robert Cornish.

As their CTO. Nasdaq Head of Exchange and Regulator Surveillance Tony Sio said his company is getting approached by crypto firms "Every week or two" to license their software, but turn down many of the requests Because the companies "Aren't reputable enough yet."