The Nasdaq Is Taking Over Crypto

The volatile market has left investors clueless about what to truly expect next. No matter the market sentiment, Nasdaq is thinking long-term. With two recent large series B investments in early 2019, Nasdaq is solidifying its position on crypto. Let’s take a deep dive into what the Nasdaq is planning.

Nasdaq Venture not Nasdaq

To clarify, the investments are coming from the Nasdaq Venture and not the Nasdaq parent company. Nasdaq Venture is an investment arm of the parent company Nasdaq. The aim of the branch is to prioritize minority stake investments that range from less than $1 million to $10 million. Specifically, these investments include seed to late-stage venture rounds.

In reality, there is not a large barrier between the Nasdaq venture and the parent company’s array of clients. Therefore, we can assume that the Nasdaq is gearing up to take over the crypto market when the time comes.

“With the launch of our new venture investment program, we are reinforcing our focus on driving growth and innovation by evaluating, distributing, licensing and integrating disruptive technologies for the long-term benefit of our global clients,” said Adena Friedman, President and CEO, Nasdaq. “Investing in pioneering fintech firms, who are developing unique technologies, continues our history of being a platform and partner of choice for the most innovative companies in the world. In addition, through this program we plan to accelerate the pace of innovation to ensure our clients continue to benefit from the technologies that are reshaping the capital markets.” — Nasdaq News

The Venture officially launched in April 2017, but based on media releases the Venture unofficially started providing investments in late 2015. The first investments were in 4 firms: Chain, Stratumn, Digital Reasoning, and Hanweck. Let’s take a minute to go over each investment and the newer investments ErisX and Symbiont.

Chain Digital Securities

From an old 2015 article published by Forbes and written by Laura Shin, we can quickly find the first investment made. The Nasdaq Venture partnered with Visa, Citi, Fiserv, Telecom Orange and Capital One to invest $30 million into Chain. Right after the series B round, Chain also announced that former American Express CEO Jim Robinson III joined Chain’s Board of Directors. All companies involved were expected to meet twice per year in order to share developments, discuss distributive ledger solutions, and increase interoperability between companies.

Where is Chain Today?

Chain posted a medium post on September 10, 2018 that announced Chain was acquired by Lightyear which is a Stellar-focused company formed in late 2017 largely by the Stellar Development Foundation. After the acquisition, Lightyear changed their name to Interstellar.

Interstellar

Below is a brief summary of details from the medium post.

The merger brings Chain’s enterprise products and customer base to Stellar’s global public ledger, creating an end-to-end solution that will enable organizations to issue, exchange, and manage assets on a highly-scalable public network. Chain’s cloud ledger service, Sequence, will allow organizations to easily track assets as they move between private ledgers and the Stellar network.

Key facts:

Adam Ludwin, who is Chain’s CEO, will be Interstellar’s CEO

Jed McCaleb, who co-founded the Stellar Development Foundation and Lightyear, will be CTO of Interstellar

The Stellar Development Foundation, which develops the Stellar protocol and supports the open source community, remains independent

Digital Reasoning Ai computing

The second investment made twice by Nasdaq Venture is to an AI solution based company Digital Reasoning. Digital Reasoning focuses on expanding “human-centric” AI Solutions and enabling digital transformation for financial institutions. Nasdaq and Lemhi lead the $40 million dollar series D investment round in early 2016 along with Goldman Sachs and HCA.

“Digital Reasoning has built an unmatched track record of helping our customers solve their most challenging problems across industries with a leading enterprise cognitive computing platform and intelligent assistants for key customer use cases,” CEO Tim Estes said. “This latest funding round accelerates continued innovation by enabling us to implement state-of-the-art Deep Learning technology into all of our offerings, deliver the world’s leading holistic surveillance solution in partnership with Nasdaq, add talented team members to pursue life saving analytics in health care with HCA and others, and drive novel Data Science initiatives at the world’s most valuable companies.” –BanklessTimes

Where is Digital Reasoning today?

In 2018, Digital Reasoning accomplished multiple things: $30 million in funding, Forbes top 50 fin-Tech , Sell-side best technology award, and bridged into the health industry . In mid October 2018, Digital Reasoning’s AI initiatives impacted hospitals by satisfying their quadruple aim: enhance the patient experience, improve overall population health, reduce costs, and improve the work life of clinicians and staff.

Hanweck Analytics

Third on our list is Hanweck. This company is a leading provider of real-time risk analytics on global derivatives markets and data. Information on the investment is vague, but what is clear is Hanweck worked closely with the Nasdaq Venture upon launch in 2017. At the same time, Nasdaq’s Jean-Jacques Louis joined the Board of Directors of Hanweck.

The team has been growing remarkably fast in the disciplines of quantitative research, quantitative modeling, derivative trading, market making, and market focused risk analysis. There is a strong assumption that Hanweck is also providing data on digital assets. This will allow Nasdaq to offer derivatives for crypto assets.

In 2017 and 2018, Hanweck was named Best (small employer) Company to Work for in New York State out of 27 other candidates.

Hanweck is the leading provider of real-time risk analytics on global derivatives markets focusing on the large-scale risk problems of banks, broker/dealers, hedge funds, central counterparties and exchanges — where the number of instruments and positions number in the millions. Hanweck delivers its risk analytics as a real-time service — usually in the form of a data feed — dramatically simplifying integration with its customers’ risk architecture. — benzinga, Globe Newswire

Where is Hanweck Today?

Recently from January 8, 2019. The headline read, “Hanweck Listed in the Top 50 of Chartis: RiskTech100® 2019 Rankings”. This company is inspiring the globe through their analytic solutions.

Stratumn applications

Stratumn is one of the smaller investment made in June 2017. In total, the series round amounted to under $8 million. The round was lead by CNP, followed by Digital Currency Group and Nasdaq.

Stratumn, a Paris based start-up, was founded in 2015 and aims to help companies develop applications that want to utilize blockchain technology. To achieve this, Stratumn couples their Proof of Process (POP) and innovative cryptography in order to easily promote compliance, privacy, security, and trace-ability. Additionally, Stratumn seamlessly reduces operational costs and improves the customer experience.

“An investment in Stratumn was a natural development for us given the experimentation projects we have successfully executed with Richard and his team over the past year,” Jean-Jacques Louis, Nasdaq head of corporate strategy — Reuters

Where is Stratumn Today?

Currently, Stratumn is very busy building protocols and use-cases on their Github page. News wise, there is an article from August 2018 that discusses GDPR ( Global Data Protection Regulation) and how Stratumn is working to uphold these regulations through blockchain solutions.In our enterprise blockchains at Stratumn, stakeholders timestamp the hash of their data on a public blockchain, while putting only proofs of data as transactions on the blockchains. This allows the enterprise network to verify every transaction without exposing data.

ErisX Digital Asset Trading

Next on the list is a more recent investment ErisX. The Series B ended in December 2018 with an amount of almost $28 million. Investors included Fidelity, Nasdaq Venture and previous investors from the series A in October: TD Ameritrade, Valor Equity Partners, and Cboe Global Markets.

ErisX is an exchange based company that aims to improve digital asset trading for institutions and individuals.

With our in-depth experience of delivering and operating a fully regulated market place, ErisX is venturing into the digital asset space with a broad offering of both spot and futures contracts on one platform. ErisX is integrating digital asset products and technology into reliable, compliant, and robust capital markets workflows.

Starting with Bitcoin (BTC), Bitcoin Cash (BCH), Ethereum (ETH) and Litecoin (LTC), the ErisX solution provides trading, deposits and withdrawals on a stable capital markets technology infrastructure. — ErisX

With the range of investors looking to jump on board in such a short-time span, crypto traders should be on the lookout for a new exchange to hit the market offering Spot Contracts and futures in mid to late 2019. Granted regulatory approval is provided, this exchange should become well know to large market markers.

Where is ErisX Today?

With the recent investments, there’s a short time for development. News on the ErisX website discusses two new board members, Joseph Lubin, founder of ConsenSys, and Cris Conde, financial technology entrepreneur that joined in early 2019.

“We are pleased to welcome Joseph and Chris to the ErisX Board,” said CEO Tom Chippas. “As two leaders in the digital asset space, ErisX will benefit from the unique perspectives they offer and the enthusiasm they bring to the space.” — BuisnessWire, Jessica Darmoni

Symbiont Solutions

Last on our list and most recent in the market is Symbiont. Recently in January 2019, Symbiont finished its series B round raking in $20 million from lead investor Nasdaq Venture followed mainly by Galaxy Digital, Citi, and Raptor Group. The funding round will further cement its lead as a global financial market provider in blockchain platforms.

“Closing this round of funding enables us to accelerate investments in our platform and team,” said Symbiont CEO and Co-founder Mark Smith. “Leveraging our financial markets and blockchain technology experience, our anchor partners like Vanguard, Lewis Ranieri, and Nasdaq will benefit from developing new distributed applications on Assembly, our enterprise blockchain and smart contract platform. Assembly provides the opportunity for new participants to enter the digital asset market and offers existing participants a superior infrastructure on which to build the future of financial markets.” — PRNewsWire

Symbiont’s website mentions multiple blockchain based solutions involving: mortgages, syndicated loans, Index Data, Private Equity & Crowdfunding, Corporate Debt, and Asset Digitization. For each listed solution, the website outlines the current problems relative to that market. Great things should come out of this company and enable Nasdaq to capitalize on even more industries.

Nasdaq on the Blockchain

Nasdaq is heavily invested into the digital asset, blockchain solution, data accumulation, market making and digital exchange industries. Anyone previously discounting digital assets and blockchain as reputable industries should reconsider such opinions. Some people may recall the saying, “Money talks.” Well, it is speaking pretty clearly about the future of the Nasdaq. The question is, who will listen?