Carta's custody versus marketmaking conflict

The key issue is not one salesperson breaking rules, it is that Carta tried to sit on both sides of the market at once. Its cap table software held the authoritative shareholder record, and its liquidity products were built to turn that record into deal flow, price discovery, and faster transfers. Once the same company both safeguards ownership data and monetizes trading activity, even tightly controlled internal access paths become strategically dangerous.

• CartaX was designed on top of Carta’s system of record. That system already knew who owned shares, what restrictions applied, and the history needed to process transfers and taxes. That is what made liquidity products powerful, but it also meant internal access to cap table data had unusually high commercial value.
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• The broader private share market has long had this conflict between issuer control and broker style dealmaking. Marketplace players like Forge and EquityZen grew by finding buyers and sellers. Issuer centric platforms like Nasdaq Private Market and Carta aimed to make trades cleaner and more controlled, but they still faced pressure to generate volume.
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• The panel makes clear that Carta’s secondary volumes were not large enough to justify trust damage. That matters because Carta’s core business depends on companies treating it like neutral infrastructure. In that context, even a limited internal break glass path is a problem, because customers expect cap table data to function more like custody data than sales intelligence.
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Going forward, the winning model in private market liquidity is likely to separate data custody from market making more cleanly. Carta can keep growing as the ledger and transfer rail for private ownership, but the firms that originate trades, aggregate buyers, and push price discovery will need clearer distance from the system that holds confidential issuer data.