CFTC to adopt Nasdaq surveillance to monitor crypto markets
The US regulator will use Nasdaq’s system to detect manipulation across derivatives and prediction markets
Artwork by Crystal Le
This article was generated with the assistance of AI and reviewed by editor Jeffrey Albus before publication.
The Commodity Futures Trading Commission (CFTC) announced today that it will begin using Nasdaq’s SMARTS surveillance platform to monitor trading in digital asset derivatives and prediction markets.
The move expands the regulator’s toolkit as it looks to better detect misconduct in fast-evolving crypto markets. SMARTS, one of Nasdaq’s flagship monitoring systems, is already deployed by dozens of global exchanges and regulators to flag irregular trading patterns, including signs of manipulation and abusive practices.
By extending the technology to digital assets, the CFTC aims to address growing concerns about wash trading and other forms of misconduct that have accompanied the rise of onchain prediction markets and complex trading strategies.
Observers have drawn comparisons to the Securities and Exchange Commission’s reliance on surveillance-sharing agreements when approving spot bitcoin and ether ETFs, suggesting that US financial regulators are converging on a common approach to market monitoring.
While the CFTC’s mandate remains centered on maintaining orderly derivatives markets, expanded surveillance could pave the way for broader enforcement, and decentralized platforms may face heightened scrutiny if the agency applies these tools beyond traditional venues.
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