Nasdaq is taking its first steps into crypto services with an emphasis on security, entering the business with a custody product for bitcoin and ether aimed at institutional investors.&nbsp;



“We feel that custody is foundational to any other service that we build,” says Ira Auerbach, the newly named head of Nasdaq Digital Assets. “The ability to hold on to our customers&#8217; funds in a safe, secure, scalable and accessible manner is a key launch point for anything else we do in the future,” added the former head of the Gemini exchange’s crypto prime brokerage.&nbsp;



Crypto custody is central not only to Nasdaq’s digital asset ambitions, but to the industry as a whole. Clients are required to place enormous trust in their custodians, a confidence that individual investors are skeptical of handing over. This wariness has given rise to the phrase “not your keys, not your crypto,” meaning that private keys – analogous to passwords for the accounts holding crypto funds – do not belong in the hands of intermediaries. Since institutions are unlikely to build out their own infrastructure to custody assets, they need to choose a partner prepared to take custody of institutional-sized cryptocurrency accounts.&nbsp;



When asked why clients would choose a traditional financial player instead of a crypto-native firm to take custody of their digital assets, Auerbach responds that Nasdaq is uniquely positioned because of its knowledge of what institutional clients need in order to use a financial product.



“We have a long history of working with these institutions, we know their pain points, we have products built internally to address these pain points,” Auerbach said. “We think we can make institutions much more comfortable and usher in a larger adoption of the ecosystem.”



In parallel with the custody service, Nasdaq is expanding its anti-financial crime technology to weed out money laundering, fraud and market abuse in digital assets. The advantage Nasdaq has is that the company has the capabilities to analyze potentially fraudulent behavior in both traditional markets and digital assets as well, says Valarie Bannert-Thurner, senior vice president of anti-financial crime technology at Nasdaq.



“The criminals don’t just operate on-chain,” Bannert-Thurner said. “What we’re trying to do is look at the risk and try to identify the actual players that are doing the scams or manipulating the markets and not be limited to on-chain or off-chain. We’re saying let’s look at it across.”



Bannert-Thurner says the knowledge Nasdaq has from its anti-crime business is translating into the world of crypto, even if the underlying technology looks different at times. “The actual scams are not that different from what happened before,” Bannert-Thurner said. “Money laundering is still money laundering, but done slightly differently because you have to find mechanisms to do it.”



Nasdaq sells its anti-financial crime technology as a service to clients like crypto exchanges. While the new custody product is a separate endeavor, it will have crypto-specific anti-financial crime technology built in. One of these protections includes screening details of where digital assets originated and where they are being sent. Typically, users are able to send cryptocurrencies to any address they like without the receiver having to agree, in the same way that anyone who knows where you live can send mail without your approval. This runs the risk of wallet spamming or a practice referred to as “dusting,” which became popular when addresses associated with crypto mixer Tornado Cash were sanctioned by the U.S. Treasury. Individuals who had used Tornado Cash began sending small amounts of cryptocurrencies to the wallet addresses of celebrities like Jimmy Fallon to protest the sanctions. Nasdaq’s screening tool will flag funds coming in from a sanctioned wallet, for example.



Nasdaq’s entry into digital assets comes as other players including Blackrock and Fidelity are building crypto support. In August, Blackrock partnered with Coinbase to offer a private trust offering bitcoin exposure for institutional clients. Earlier this month, EDX Markets—backed by Charles Schwab<a href="https://www.forbes.com/companies/charles-schwab" target="_blank" rel="noreferrer noopener">SCHW</a>&nbsp;<a href="https://www.forbes.com/companies/charles-schwab">-1.2%</a>&nbsp;Corp., Fidelity Digital Assets and Citadel Securities — launched with plans to trade select tokens this year. The increased investment in digital assets comes despite the market’s persistent volatility and top asset bitcoin’s price being down 59% year to date.&nbsp;



“The big firms are starting now, many of them are still exploring, but many actually already are working on moving into the space,” Bannert-Thurner said. “We certainly haven&#8217;t seen the full institutional participation yet by any stretch.”



By Emily Mason, Forbes Staff

NASDAQ – Broadway & 44th Street, NYC

Nasdaq Enters Crypto Business With Focus On Security

TOPLINE Shares of Coinbase, the nation’s largest crypto exchange, skyrocketed nearly 60% within minutes of their public-market debut on Wednesday, propelling the nine-year-old company’s market capitalization to more than 12 times its last private valuation of $8 billion in 2018 and marking another instance of booming demand lifting the still-nascent cryptocurrency space to meteoric highs.



<h4 class="wp-block-heading" id="h-key-facts">KEY FACTS</h4>



Listed on the Nasdaq exchange under the ticker COIN, shares started trading at about 1:30 p.m. EDT Wednesday and immediately surged to a price of more than $398, eclipsing the $250 reference price set on Tuesday.



The soaring stock price boosted the firm’s market capitalization to roughly $105 billion, making Coinbase one of the 100 most valuable publicly traded companies in the United States and more valuable than both New York Stock Exchange parent Intercontinental Exchange and Nasdaq Inc.—combined.



Eschewing the traditional initial public offering that enlists investment banks as intermediaries and underwriters to sell shares ahead of trading, San Francisco-based Coinbase opted instead for a&nbsp;<a href="https://www.forbes.com/sites/jeffkauflin/2021/01/29/coinbase-investors-say-it-could-hit-100-billion-valuation-when-it-goes-public/">direct listing</a>, selling 114.9 million shares on Wednesday directly to the public.



“I wanted there to be just a true market on day one that set the price, not something that was set behind closed doors,” Coinbase&#8217;s billionaire CEO, Brian Armstrong, said on CNBC Wednesday, calling the direct listing “more true to the ethos of crypto.”



Ahead of its listing, Coinbase&nbsp;<a href="https://www.forbes.com/sites/jonathanponciano/2021/04/06/coinbase-posts-record-18-billion-revenue-as-crypto-market-shoots-past-2-trillion-direct-listing/">reported</a>&nbsp;first-quarter revenue that climbed nearly 900% from $190.6 million in the same period last year, blowing past the $585 million it nabbed in the fourth quarter.



Update 5 p.m. EDT: Coinbase shares closed Wednesday at a price of roughly $328, up 31% from the reference price and giving Coinbase a market capitalization of about $86 billion.



<h4 class="wp-block-heading" id="h-crucial-quote">CRUCIAL QUOTE&nbsp;</h4>



“The Coinbase [listing] is a watershed moment and historical event for the crypto industry and something Wall Street will be laser-focused on to gauge investor appetite going forward,” Wedbush Analyst Dan Ives said in a Wednesday morning note to clients, calling Coinbase a “barometer” for growing mainstream [crypto] adoption.&nbsp;



<h4 class="wp-block-heading" id="h-key-background">KEY BACKGROUND</h4>



Coinbase’s foray into the public market comes after a massive year of growth for cryptocurrencies, fueled by inflationary concerns and heightened institutional adoption. Morgan Stanley and Goldman Sachs started offering cryptocurrency to their wealthy clients just last month, and companies like Tesla, MicroStrategy and payments fintech Square have purchased billions of dollars of bitcoin as a means to diversify their largely U.S. dollar-based balance sheets. Up a staggering 825% over the past year, bitcoin hit its latest high, of just under $65,000, early Wednesday morning. The total cryptocurrency market is worth more than $2.2 trillion.



<h4 class="wp-block-heading" id="h-chief-critic">CHIEF CRITIC</h4>



“Even though Coinbase’s revenue surged over the past 12 months, the company has little to no chance of meeting the future profit expectations that are baked into its ridiculously high expected valuation of $100 billion,” says David Trainer, the CEO of investment research firm New Constructs. “The crypto markets are very young, and we expect many more companies to compete for the profits Coinbase enjoys today.”



<h4 class="wp-block-heading" id="h-tangent">TANGENT</h4>



Coinbase joins a growing rank of buzzy tech companies that have started trading over the past year—to varying degrees of fanfare. Gen-Z gaming platform Roblox, which similarly opted for a direct listing, jumped more than 50% on its&nbsp;<a href="https://www.forbes.com/sites/jonathanponciano/2021/03/10/roblox-valuation-hits-42-billion-as-gen-z-gaming-giant-skyrockets-50-in-ipo/">first trading day</a>&nbsp;in January and has since climbed about 6% higher. Airbnb and Doordash debuted in December, and both roughly doubled on their first day of trading, but&nbsp;<a href="https://www.forbes.com/sites/jonathanponciano/2020/12/10/airbnb-ipo-shares-valuation-billion-more-than-marriott-hilton-hyatt/">Airbnb</a>&nbsp;has jumped about 25% since then, while&nbsp;<a href="https://www.forbes.com/sites/jonathanponciano/2020/12/09/doordash-ipo-shares-first-day-of-trading/">DoorDash</a>&nbsp;has tanked 23%.



<h4 class="wp-block-heading" id="h-what-to-watch-for">WHAT TO WATCH FOR</h4>



Crypto regulation. “With cryptocurrencies’ astronomical price jumps, and as they become increasingly embedded in the global financial system, investors must expect much greater government scrutiny,” Nigel Green, the CEO of $12 billion advisory deVere Group, said in a Wednesday note, adding that Coinbase’s direct listing will help the firm reach a wider investment base other than “the usual crypto evangelists.” Gary Gensler, a blockchain and cryptocurrency professor at the MIT Sloan School of Management, was&nbsp;<a href="https://www.forbes.com/sites/jonathanponciano/2021/04/14/gary-gensler-confirmed-sec-chairman/">confirmed</a>&nbsp;as the Securities and Exchange Commission’s new chairman on Wednesday, and one SEC official has said&nbsp; he’s “sympathetic to the call for regulatory clarity” in the space.



<h4 class="wp-block-heading" id="h-further-reading">FURTHER READING</h4>



<a href="https://www.forbes.com/sites/jonathanponciano/2021/04/13/bitcoin-hits-new-high-ahead-of-coinbase-listing-but-74-of-fund-managers-think-its-just-a-bubble/">Bitcoin Hits New High Ahead Of Coinbase Listing, But 74% Of Fund Managers Think It&#8217;s Just A Bubble</a>&nbsp;&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/jonathanponciano/2021/04/06/coinbase-posts-record-18-billion-revenue-as-crypto-market-shoots-past-2-trillion-direct-listing/">Coinbase Posts Record $1.8 Billion In Revenue As Crypto Market Shoots Past $2 Trillion</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/michaeldelcastillo/2020/02/19/coinbase-billionaire-brian-armstrongs-plan-to-make-bitcoin-ethereum-xrp-safe-for-all/">Bitcoin&#8217;s Guardian Angel: Inside Coinbase Billionaire Brian Armstrong&#8217;s Plan To Make Crypto Safe For All</a>&nbsp;(Forbes)



<a href="https://www.forbes.com/sites/jeffkauflin/2021/01/29/coinbase-investors-say-it-could-hit-100-billion-valuation-when-it-goes-public/">Coinbase Investors Say It Could Hit $100 Billion Valuation When It Goes Public</a> (Forbes)



By Jonathan Ponciano, Forbes Staff

In this photo illustration, the Nasdaq Stock Market logo

Coinbase Skyrockets In Nasdaq Listing, Landing $105 Billion Valuation On First Day Of Trading

Crocs Inc. is an American company started, in 2002, with an idea of a comfortable boating shoe. After having sold all their stock, in 17 colors, at boating shows, the founders expanded their market. In 2006, the company listed on the NASDAQ Exchange and has a current market capitalization of $1.45 billion.
The company’s shoes are made from Croslite; its propriety closed-cell resin which is lightweight, eliminates odor and prevents bacterial and fungal growth. The material allows the shoes to perform both in and out of water, much like the amphibian crocodile—hence the name. Crocs Inc. has operations in three regions: the Americas, Asia and Europe; with Africa falling under the Asian market.
Gareth Kemp is the managing director of Crocs Inc. South Africa and is in charge of the company’s growth on the continent. A qualified engineer, Kemp left the South African Navy in 2002 and opened a retail store because he lost interest in seafaring. His career in the Navy was more about managing people than actual engineering, which was done by external contractors. Kemp says he was always interested in business as both his father and brother were
in business.
“I just had a calling to business and retail was a channel that I was quite interested in and just pursued it,” he says.
In 2005, he was approached by the South African distributors of Crocs, Tiger Trade, and started selling for them. The distribution company was bought out by Crocs Inc. in 2009 and Kemp took over as the marketing and sales director. In 2011, he became managing director.
Crocs South Africa distributes into the Ivory Coast, Senegal, Ghana, Mauritius, Mozambique, Zimbabwe, Botswana, Namibia, Kenya, Uganda and Angola. Angola is its newest entry with the first store opened October 25.
“Keeping in mind the challenges around strict visas and currency control we&#8217;re happy with what has been achieved,” Kemp says referring to performance in Angola.
Kemp feels that Africa has huge potential and opportunity and is ready to deal with the challenges that lie ahead. Some of which he says are the stigma associated with the continent, language barriers and making sure you choose the right partners.
Crocs used to be something that only chefs and nurses would be caught dead in. Being on your feet for hours on end meant style took a backseat to comfort. According to Crocs, this need no longer be the case. The company has come a long way from the clunky clog. With more than 300 styles per season Kemp says the biggest challenge is changing people’s style perceptions about the brand. The footwear is designed in Japan, Italy and the United States. In moving towards diversifying their products, the company also has golf shoes designed with consultation from internationally renowned golf instructor Hank Haney.
“One of our slogans from the
past was ‘Ugly can be beautiful’,”
says Kemp.
Most of the product gets shipped in from China, warehoused in Cape Town and distributed to the rest of
the continent.
The research and development is market-specific. The product merchandisers go out into the field and find out what the customers want. All the global markets have an input in the design direction. The new ranges are then presented twice a year in Singapore. There are three distribution channels: retail, wholesale and online.
If demand grows beyond the company’s current capabilities then a factory on the continent may be a possibility, but Kemp thinks this is still a long way off.
Crocs earned a place in TIME’s “The 50 Worst Inventions” list alongside Farmville, Hair in a Can, Spam email and asbestos. The shoe was however included in the Design Museum’s book entitled “Fifty Shoes That Changed The World”. It was named one of South Africa’s ‘Super Brands’ in 2010, based on market dominance, longevity, goodwill, customer loyalty and overall market acceptance. There’s even a blog called ‘I Hate Crocs dot com’ as well as a ‘I Don’t care How Comfortable Crocs Are, You Look Like A Dumbass’ Facebook page with 1.6 million ‘likes’. Love them or hate them, Crocs don’t seem to be going anywhere.
“I must be honest, in the beginning I wasn’t a fan myself. It was quite a strange looking shoe,” says Kemp.
Last year, the company launched what it refers to as its fashion styles. Although the company is worried about moving away from its core market in the lifestyle and outdoor sector, to fashion, its customers don’t seem to mind. Kemp says the fashion range sold out in a month.
“We had to scramble to get more stock. It was certainly very refreshing and very exciting for us.”
Kemp admits they were worried about knock-offs in the beginning. The first batch of fake Crocs in South Africa came sometime between 2006 and 2007. He doesn’t feel that this affects the company much anymore since the level of counterfeiting has decreased as it’s getting harder to keep up with the various styles. The cost of a children’s pair of authentic Crocs does however make it easier for parents to buy
the counterfeit.
There’s a joke that goes something like this: “In a million years from now when aliens land on earth, all they’ll find are landfills with Crocs.”
Crocs are recyclable. There used to be an initiative where people would drop off their old Crocs and the company recycled them into new ones for the less fortunate. A hundred thousand pairs were sent to Japan after the 2011 tsunami. However, the recycling process became too much of a logistical nightmare.
The company’s 2012 second quarter results revealed that revenue for the quarter had increased by 12% to $330.9 million—the highest revenue level in its history. Asia was the best performing region with revenue increasing by 20.5% (as of June 30); there are 233 company-operated retail locations in the Asian region and Africa is benefiting from being a part of this market. In 2011, Asia experienced a 34% year-on-year increase, which was higher than the global increase
of 27%.
As far as the future is concerned, Crocs Inc. has partners creating spectacles, sunglasses and children’s clothes under license. South Africa is focusing on current operations and avoiding growing its retail arm too aggressively. The company wants to become a fully established footwear company. Who knows, the fashionistas may be won over.

Tag: NASDAQ Exchange

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Nasdaq Enters Crypto Business With Focus On Security

Coinbase Skyrockets In Nasdaq Listing, Landing $105 Billion Valuation On First Day Of Trading

Stepping Out; Make It Snappy