Bitvavo, a Dutch cryptocurrency exchange, has teamed up with Nasdaq to keep an eye on the markets for indications of illicit behavior.
In a news release issued today, July 31, the EU-regulated cryptocurrency exchange Bitvavo stated that it will employ the Nasdaq Market Surveillance tool to look into and identify “suspected market abuse.”
The agreement states that the cryptocurrency exchange with its headquarters in Amsterdam will analyze “suspicious activity through a wide range of alerts,” “replay its order book” with a “consolidated audit trail” across different listed assets, and obtain trading insights and visualizations.
Additionally, the exchange intends to use the tool to generate reports it will send to the appropriate regulators.
Tony Sio, head of regulatory strategy and innovation at Nasdaq, commented on the agreement and said that the cryptocurrency market has “significant challenges” compared to traditional markets regarding investor protection and market confidence. Additionally, Sio cited regional EU laws when he said:
“Our market surveillance technology can play a powerful role enhancing the integrity of digital asset exchanges, helping to deliver many of the objectives of the incoming MiCA regulation.”
It is clear from the press release that the partnership seeks to address these issues and comply with the EU’s recently enacted Markets in Crypto-Assets Regulation, or MiCA, which places “strict rules and requirements” on cryptocurrency exchanges for identifying and disclosing market abuse.
These requirements are comparable to those for traditional financial markets. The Dutch Central Bank has granted Bitvavo a regulatory license to operate as a provider of digital asset services.
Bitvavo was founded in 2018 by Jelle de Boer and Tim Baardse. Bitvavo disclosed in December 2022 that about €280 million of its funds were held by Digital Currency Group, the parent company of Grayscale, Foundry, and Lun, which became embroiled in legal issues after the collapse of FTX.
After settling with the American cryptocurrency company, the exchange stated that it anticipates receiving at least 80% of the monies trapped from DCG.