American stock exchange operator, Nasdaq, has abandoned its plan to expand its digital asset services by introducing cryptocurrency custody services to institutional investors. year. The launch of the service was initially planned as the Wall Street giant’s first major crypto project.

Nasdaq Drops Plan to Crypto Custody Services

Earlier in March, Ira Auerbach, the Head of Nasdaq Digital Assets, disclosed that the marketplace operator had applied for a limited-purpose trust company charter from the New York financial services regulator. The exchange sought the license so as to float a digital asset custody service.

However, during an earnings call held today (Wednesday), Adena Friedman, the exchange’s Chief Executive Officer, told investors the company had decided to suspend the plan “considering the shifting business and regulatory environment in the US.”

According to CoinDesk, the Nasdaq CEO, however, noted the firm will continue to support the digital asset industry, including through efforts to secure approval for spot Bitcoin exchange-traded funds (ETFs) from the US Securities and Exchange Commission.

Nasdaq, one of the biggest stock exchanges in the world, is a global financial services powerhouse. During the second quarter of 2023 ended June, the company generated $1.43 billion in revenue.

In September last year, the exchange launched its digital asset services division, with plans to diversify into crypto custody solutions. However, the decision to shelve the plan is a major blow to institutional clients who in recent years started showing enthusiasm for the crypto industry.

Nasdaq’s decision comes at a time the SEC is waging a legal battle against Binance and Coinbase, the largest crypto exchanges in the United States, alleging that both platforms are operating without permission and engaging in the sale of 'unregistered' crypto asset securities.