Nasdaq Appears to Be Laying the Groundwork for a Crypto Trading Desk

Nasdaq Appears to Be Laying the Groundwork for a Crypto Trading Desk

Omar Faridi
  • Nasdaq's $190 million offer to acquire Swedish fintech firm Cinnober is expected to materialize by Q4 2018. 
  • Nasdaq appears to be laying the groundwork for its own crypto exchange as Cinnober's recent partnership with BitGo was aimed at acquiring expertise in crypto custodial solutions.

New York City-based National Association Securities Dealers Automated Quotations (Nasdaq) made a $190 million “all cash recommended public offer” on September 14 to acquire Sweden’s crypto-friendly Cinnober, an independent global provider of financial technology to clearinghouses and exchanges.

Interestingly, Nasdaq’s offer came around the same time when reports surfaced that Minium, one of Cinnober’s subsidiaries focused on developing risk and post-trade technology, was planning to expand by offering sell-side back offices services. These typically include developing software solutions for a financial institution’s human resources and settlement departments.

Crypto Price Prediction, Futures, Trading

Looking at these developments suggests Nasdaq is beginning to lay the groundwork to possibly launch a cryptocurrency trading desk. As covered on CryptoGlobe, Nasdaq may also be looking to add crypto price prediction tools for 500 different digital assets, according to inside sources.

Shortly after digital currency prices reached an all-time high in December of 2017, Nasdaq CEO Adena Friedman said the American stock exchange was “investigating the idea of a cryptocurrency future.” In April, Friedman revealed Nasdaq was considering launching its on digital asset trading platform.

Inside sources also recently said Nasdaq, currently the world’s second largest stock exchange, was preparing to act quickly to list cryptocurrencies by next year. This is likely in an effort to remain competitive as the New York Stock Exchange’s (NYSE) parent company, the Intercontinental Exchange (ICE), announced its plan to launch Bakkt, a crypto trading desk.

Unanimous Decision

Notably, Nasdaq’s pending acquisition of Cinnober, which is expected to materialize in Q4 2018, has been unanimously approved by the fintech firm’s board of directors. With a current market capitalization of 1,790,002,179 Swedish Krona (appr. $201.6 million), Cinnober’s board members have agreed to Nasdaq’s offer.

The US stock exchange’s offer is to buy “outstanding shares and warrants in Cinnober at a price of SEK 75 per share and SEK 85 per warrant. The transaction represents an offer value of approximately SEK 1,702m (appr. $190 million),” Nasdaq’s press release noted.

Other recent developments that may have potentially influenced Nasdaq’s offer to Cinnober include the fintech firm partnering with BitGo, a leading provider of custodial solutions for cryptocurrencies. Commenting on Nasdaq’s bid, Cinnober co-founder and board chair Nils-Robert Persson remarked: 

I really believe in the strategic logic of combining Cinnober and Nasdaq’s Market Technology business also as it reinforces the strong technology foundation in Sweden. As the largest shareholder of Cinnober, I am supportive of the offer and intend to accept the offer.

Nils-Robert Persson

Meanwhile, Friedman said:

The combined intellectual capital, technology competence and capabilities of Cinnober and our Market Technology business will expand the breadth and depth of our fastest growing division at Nasdaq...This acquisition will enhance our ability to serve market infrastructure operators worldwide, and will accelerate our ability to expand into new growth segments

Adena Friedman