Nasdaq's $100M Bet on Tokenized Markets Sparks Equity Derivatives Row

Nasdaq has agreed to invest $100 million in Payward, the parent company of cryptocurrency exchange Kraken. The investment will be used to support the development of tokenized markets and a planned rollout of Nasdaq's surveillance technology across Payward's trading venues.

The announcement comes on the heels of a comment letter from Citadel Securities, which urged U.S. regulators to keep products tied to public companies within the Securities and Exchange Commission's (SEC) perimeter. Citadel argued that effective oversight requires regulators to surveil an equity-linked product together with activity in the underlying cash equity.

The dispute centers on the classification of equity-linked derivatives, such as perpetuals, which are tied to public company shares or financial metrics. The SEC has approved some of these products under its rulemaking authority, but Citadel argued that they should be subject to more stringent oversight and regulation.