Nasdaq proposes new crypto trading rules to SEC

Nasdaq has introduced a comprehensive digital asset framework to the U.S. Securities and Exchange Commission, aiming to integrate cryptocurrencies into traditional capital markets while maintaining investor protections.

In a letter dated April 25, Nasdaq’s executive vice president and global chief legal, risk, and regulatory officer, John A. Zecca, outlined a four-tier classification system for digital assets.

The proposed categories are Financial Securities, Digital Asset Investment Contracts, Digital Asset Commodities, and Other Digital Assets.

“A successful taxonomy would include clear categories and a process to manage change going forward as the industry evolves,” explained Zecca.

“Whether it takes the form of a paper share, a digital share, or a token, an instrument’s underlying nature remains the same and it should be traded and regulated in the same ways,” stated Nasdaq, emphasising that tokenised financial securities should be regulated the same as their traditional counterparts.

To foster innovation while protecting investors, Nasdaq recommends establishing a specialised trading venue called “ATS-Digital” or “ATS-D.”

This platform would allow trading of digital asset investment contracts, commodities, and unclassified digital assets under a new regulatory structure.

“Create a new category of ATS called ‘ATS-Digital’ or ‘ATS-D’ that may trade Digital Asset Investment Contracts, Digital Assets Commodities, Other Digital Assets, and Temporarily Unclassified Digital Assets in its own appropriately regulated ecosystem,” proposed Zecca.

Nasdaq also suggests a voluntary safe harbor for digital assets that do not fit existing categories, allowing risk-based disclosures while regulators determine final classifications.

“Innovation must serve the interests of investors, and not the other way around,” Zecca wrote.

The proposal encourages coordination between the SEC, CFTC, and Congress to ensure a robust regulatory environment for digital assets.

“Establish an attractive path for integrating digital asset technology into the capital markets,” believes Nasdaq.

If adopted, Nasdaq’s framework could redefine how digital assets are traded and regulated in the U.S., potentially setting a precedent for global markets.