Nasdaq is now working with seven crypto exchanges to assist with fraud detection

A recent report from Forbes has detailed how Nasdaq is now working with seven crypto exchanges, providing the exchanges access to their technology to scan for fraudulent transaction patterns.

Nasdaq is a US-based stock exchange and ranked as the second-largest stock exchange in the world by market capitalisation.

The report highlights how Nasdaq has a team of “about 20 people” who contribute to provide an “elaborate” due-diligence process.

Crypto exchanges who wish to use Nasdaq’s proprietary surveillance system “need to have more than money.”

The aim of the team is to ensure that any exchange who wants to use their technology to scan for fraudulent transaction patterns is “both technically capable and morally inclined to use the powerful software wisely.”

Exchanges who are able to pass the test and pay the bill will be granted access to the same surveillance system that Nasdaq itself uses. In doing so, exchanges will be able to ensure their trading volume is free from fraud and manipulation.

Reportedly, “seven cryptocurrency exchanges have passed Nasdaq’s muster.” However, only two of the seven, Gemini and SBI Virtual Currency, have been made public.

Tony Sio, who works within the surveillance division at Nasdaq, stated: “Historically, we don’t do such large vetting processes for our clients because they are much more well-known, but as we started working with less well-known names, start-ups, then we realised we needed to check this process.”

Nasdaq’s test for exchanges includes three categories: Business Model, Know-Your-Customer (KYC) / Anti-Money Laundering (AML), and Exchange Governance and Controls.

The news appeared on Reddit via a post made by user CCNewsBot. However, it has received mixed reactions.

One user commented, “Working with doesn’t guarantee anything. For all we know, NASDAQ might just be borrowing some engineering and that’s it.”

Another user noted, “I think it’s a good thing. The cryptocurrency market is awash with manipulation, and if this helps exchanges get past that, that’s good for the whole cryptocurrency world.”

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