Nasdaq Advises SEC to Focus on Defining Digital Assets in Four Buckets

Nasdaq, the operator of one of the premier U.S. stock exchanges and a crypto index, is advising the U.S. regulators to carefully focus on defining digital assets in four buckets that will clearly determine which agency acts as referee.

Nasdaq, operator of one of the premier U.S. stock exchanges and a crypto index, is advising the U.S. regulators to carefully focus on defining digital assets in four buckets that will clearly determine which agency acts as referee, according to a 23-page letter sent to the S.E.C.'s crypto task force.

The securities categories belong in the hands of the S.E.C, which will be working with its cousin agency, the Commodity Futures Trading Commission, that will handle the commodities. Those agencies — presumably directed at some point by a new crypto law hatched by Congress — will figure out the precise border between their jurisdictions.

The letter, signed by John Zecca, the company's chief regulator executive, argued that "digital assets that constitute financial securities must trade as they do today."

Nasdaq also suggested that the two agencies should formulate a kind of crossover trading designation for platforms that can handle digital asset investment contracts, commodities and other types of assets, in one common roof.

In the letter, Nasdaq underlined its digital-asset credibility, saying its "trading and clearing services, market and trading surveillance, and central securities depository technology support digital assets platforms on six continents." It contended that the regulators should consider imposing safety measures or further constraints on firms that want to handle investors' activity from top to bottom, which is the common approach of existing crypto firms.