CFTC adopts Nasdaq surveillance tech to oversee digital asset markets

Key Takeaways

The CFTC has deployed Nasdaq’s surveillance technology to enhance oversight of derivatives and digital asset markets.
Nasdaq’s system enables automated alerts and cross-market analytics to help prevent fraud, manipulation, and abuse.

The Commodity Futures Trading Commission (CFTC) has adopted Nasdaq’s Market Surveillance platform, one of the world’s most widely used surveillance technologies, to enhance its oversight of derivatives and digital asset markets, according to a Wednesday statement.

The deployment of Nasdaq’s market surveillance technology is part of a modernization push led by Acting Chair Caroline Pham to make the CFTC a “21st century regulator,” replacing its decades-old market surveillance system.

“As our markets continue to evolve and integrate new technology, it’s critical that the CFTC stays ahead of the curve,” said Pham in a statement. “Nasdaq Market Surveillance will, for the first time, provide the CFTC with automated alerts and cross-market analytics that will benefit each of the CFTC’s operating divisions and better protect our markets from fraud, manipulation, and abuse.”

Tal Cohen, President at Nasdaq, said today’s financial markets require advanced surveillance technology that can adapt to rapid regulatory changes and emerging asset classes.

He noted that Nasdaq, as both a market operator and a technology provider, holds a unique position at the intersection of innovation and regulation.

“We’re proud to partner with the CFTC and support their mission to promote the integrity, resilience, and vibrancy of the US derivatives markets,” Cohen stated.

Nasdaq Market Surveillance, which serves over 50 exchanges and 20 international regulators globally, enables integrated monitoring across CFTC markets. The platform identifies potential manipulation patterns across multiple asset classes, conducts transaction-level analysis, and generates automated alerts across products and trading venues.

The system provides real-time analysis capabilities through comprehensive order book data access, crucial for preventing market abuse in both traditional and crypto asset markets. Its flexible architecture allows for rapid scaling during periods of heightened volume and volatility.

The technology upgrade comes as the CFTC expands its regulatory scope, particularly in digital asset markets.

Last week, the agency initiated a new phase of its ‘Crypto Sprint’ initiative, aiming to implement recommendations from the President’s Working Group on Digital Asset Markets.

Pham announced plans for stakeholder engagement and public comment to further develop regulations for leveraged, margined, or financed retail trading of crypto tokens on registered exchanges.