CFTC Taps Nasdaq Tech to Strengthen Crypto Market Oversight

The Commodity Futures Trading Commission (CFTC) has made new efforts for better oversight of the fast-growing crypto market. It has partnered with Nasdaq for a new surveillance system to replace the current one it uses. The upgrade strengthens oversight real-time fraud detection and cross-market analytics, while still supporting traditional asset monitoring.

CFTC Adopts Nasdaq Tech for Advanced Crypto Market Surveillance

Acting Chairman Caroline Pham said in the press release that the adoption is part of efforts to modernize the CFTC. She said that the platform would provide automatic alerts and in-depth transaction analysis that are essential in monitoring crypto operations. As crypto markets evolve, regulators need to be well equipped with the latest tools for adequate oversight.

Nasdaq’s technology is already relied on by more than 50 exchanges and 20 international regulators. Its surveillance platform provides regulators with the ability to identify manipulation patterns across crypto tokens, stablecoins, and derivatives tied to digital assets.

It can also provide scalability when volatility is extreme. This is an aspect that is of importance in the crypto world because trading volumes often increase during times of peak volatility. Tal Cohen, President at Nasdaq, said the collaboration reflects how innovation and regulation intersect. He highlighted Nasdaq’s experience operating markets and providing technology to protect investors.

CFTC has adopted an expanded role in regulating crypto assets, with crypto derivatives, stablecoins and event-based tokens all falling within its remit. In response to a White House report, the regulator recently launched a crypto sprint, marking its interest to widen the crypto supervision.

Although the CFTC continues to regulate commodities, currencies, and fixed income, the agency believes that there is a need to upgrade its surveillance measures, especially as it concerns supervision of the crypto market. The extended trading hours and the availability of multiple assets are creating greater possibilities for fraud and manipulation. So, advanced monitoring has become essential.

Sophisticated Surveillance Monitors Crypto Wash Trading and Pump-And-Dump Schemes

Nasdaq system is integrated to support decision making in real-time with full coverage of order book data. This will enable the CFTC to detect suspicious trading on any crypto exchange and derivatives platforms faster.

The new system will enhance efficiency in the detection of pump-and-dump schemes, wash trading, and other abuse typically seen in crypto markets. The augmented surveillance will also help traditional markets.

With the automated surveillance, the CFTC will be able to act quicker against manipulation and frauds that undermine investor confidence in digital assets. The adoption can also make the CFTC a role model to other regulators around the globe who deal with a similar challenge.

By implementing Nasdaq’s technology, the agency will be able to secure both the crypto and the derivatives markets. It will also be ready to deal with the complexities of future-generation finance.