Major Crypto Exchanges Form Self-Regulatory Bodybr>
Four major cryptocurrency exchanges have joined forces to establish an industry-sponsored, self-regulatory organization (SRO) to oversee virtual commodity marketplaces.
In March of this year, Cameron and Tyler Winklevoss, the founders of crypto exchange Gemini, proposed setting up the “Virtual Commodity Association” (VCA) to foster financially sound, responsible, and innovative virtual commodity markets through a system of industry-sponsored standards, sound practices, and oversight.
The VCA has now been established with Gemini launching a working group to begin developing these standards. In addition to Gemini, the initial participants in the VCA Working Group will include Bitstamp, bitFlyer USA, and Bittrex. The VCA interim Executive Director will be Maria Filipakis, formerly an Executive Deputy Superintendent at the New York Department of Financial Services (NYDFS) and was instrumental in drafting the NYDFS rules and regulations for cryptocurrency.
“I applaud the VCA and its members in their commitment to strengthen the digital asset industry’s regulatory landscape, rules for the protection of customers, and bring forth industry setting best practices and market transparency,” Filipakis said.
The VCA’s first meeting is set to take place in September this year. Working Group participants expect to discuss guidelines for membership in the VCA, guidelines for best practices and rules-based marketplaces that will promote fairness, transparency, risk management, and liquidity, and guidelines for best practices that will address member conflicts of interest, client communications, client disclosures, and record keeping.
Bitstamp CEO Nejc Kodrič said that they joined the VCA because they believe in the value of self-regulation, which, he said, they pursued in Europe almost from their inception, and look forward to following a similar path in the US.
“We’re proud to be a part of the Virtual Commodity Association as a way to add another element of protection for consumers,” said Kodrič. Those that can’t or won’t comply with regulations put consumers – and their own operations – at risk.”
Hailey Lennon, bitFlyer USA’s Director of Compliance, said that regulations in the crypto space are evolving to encompass this new technology. He said industry leaders with extensive knowledge and who are impacted by regulations should really be part of the conversation.
“bitFlyer is excited to see the start of coalitions and SROs in the US and we look forward to the formation of this working group,” said Lennon.
John Roth, Chief Compliance and Ethics Officer at Bittrex, said that the blockchain industry must focus on protecting its customers and operating in a responsible manner to significantly increase adoption globally.
“By working with the VCA, we can advance our shared goals of improving transparency, accountability and security across all virtual currency trading platforms,” Roth said. “This effort will also complement our discussions with regulators and legislators about developing a long-term solution that creates a fully-compliant environment for blockchain while encouraging innovation, economic growth, and U.S. leadership in the industry.”