Nasdaq Unveils Vetting Process for Bitcoin Exchanges – Bitcoinist.com

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Esther Kim

Nasdaq has unveiled its comprehensive onboarding process for Bitcoin exchanges looking to use its proprietary surveillance tools as part of efforts to combat wash trading and other forms of market manipulation. The stock exchange operator says that it has already on-boarded seven platforms.


Rigorous Vetting Needed for Bitcoin Exchanges

Nasdaq has a team of 20 people conducting due-diligence checks on Bitcoin exchanges that want to start using the company’s trading surveillance technology, reports Forbes.

This team tries to examine if each applicant has the technical capacity to employ the tools as well as a commitment to best practices.

The process covers the examination of three main areas; business model, KYC/AML protocols, and exchange governance/controls, explains, Tony Sio, Exchange and Regulator Surveillance chief. He adds:

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.

Combating Bitcoin Wash Trading

SBI Virtual Currency and Gemini, along with five other unnamed platforms have already scaled through the vetting process.

Back in July 2018, Bitcoinist reported that Nasdaq was already working SBI, Gemini and three other unnamed exchanges, meaning the stock exchange giant has added two new client platforms.

In November 2018, the company declared that it could lead the fight to combat market manipulation through the use of its trading surveillance technology.

Market manipulation is indeed a concern and is often cited as one of the biggest reasons the Bitcoin ETF has not yet been approved. A 2018 report by the Blockchain Transparency Institute (BTI) alleged that more than 70 percent of the top 100 exchanges listed on CoinMarketCap were engaging in wash trading.

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