Commodity Futures Trading Commission (CFTC) integrates Nasdaq financial monitoring tools to combat market manipulation

# The Software Targets Market Abuse Such as Insider Trading and Manipulation in the Stock and Cryptocurrency Markets

The U.S. Commodity Futures Trading Commission (CFTC) Integrates Nasdaq’s Financial Surveillance Tools to Combat Market Manipulation

The U.S. Commodity Futures Trading Commission (CFTC) is integrating financial surveillance tools developed by Nasdaq, a stock exchange firm, to fully overhaul its infrastructure dating back to the 1990s.

Tony Sio, Head of Regulatory Strategy and Innovation at Nasdaq, told Cointelegraph that Nasdaq’s software focuses on detecting market abuse, including insider trading activities and market manipulation in both stock and cryptocurrency markets. He stated:

“Customized algorithms detect suspicious patterns unique to the digital asset market. It provides real-time analysis of order book data across cryptocurrency trading venues, as well as cross-market analysis that can correlate activities between traditional and digital asset markets.”

Sio noted that the data fed into the surveillance system will be “obtained through the CFTC’s regulatory authority.”

Privacy, CFTC, United States

Number of pump-and-dump tokens launched between January 2022 and November 2024—this is just one form of market manipulation. Source: Chainalysis

Financial surveillance remains a hot-button issue in the cryptocurrency space. Privacy advocates argue that surveillance paves the way for a digital “prison,” while others contend that anti-money laundering (AML) technologies are essential for institutional adoption of cryptocurrencies.

## Growing Focus on Surveillance in the DeFi Space

The U.S. Department of the Treasury is exploring the possibility of requiring digital identity checks to be embedded in Decentralized Finance (DeFi) smart contracts to combat illegal fund flows.

Combating illegal finance is one of the directives outlined in the White House’s July cryptocurrency report, which also includes proposals for taxation and market structure of U.S. digital assets.

The White House report recommends that the Treasury Department and the National Institute of Standards and Technology (NIST) develop additional Know Your Customer (KYC) parameters for digital assets.

Privacy, CFTC, United States

Policy recommendations from the White House cryptocurrency report. Source: The White House

The report also suggests revising existing NIST digital identity guidelines and fully reforming identity credential tools.

Critics of these proposals argue that adding such tools to DeFi protocols violates the core concept of permissionless, decentralized architecture.

Mamadou Kwidjim Toure, CEO of investment platform Ubuntu Tribe, told Cointelegraph: “If you transform a neutral, permissionless infrastructure into one where access is controlled by government-approved identity credentials, it fundamentally changes the original intent of DeFi.”

### Disclaimer

The views expressed in this article are solely those of the author and do not constitute investment advice for this platform. This platform makes no guarantees regarding the accuracy, completeness, originality, or timeliness of the information contained in the article, nor shall it be liable for any losses arising from the use of or reliance on such information.