Crypto markets have fallen on hard times recently with declining prices and increasing regulatory attention, but a new Winklevoss twin-backed group is looking to lay the groundwork for a self-regulatory body that would clean up the industry.
The Virtual Commodities Association, first proposed in March 2018 and officially launched on Monday, is an industry working group comprised of cryptocurrency exchanges and custodians.
Its intention to work “toward the goal of establishing an industry-sponsored, self-regulatory organization for the U.S. virtual currency industry, specifically virtual commodity marketplaces.”
“In keeping with our mission to build the future of money and our belief in the importance of thoughtful regulation in the virtual currency industry, we have decided to join the Virtual Commodity Association working group,” Cameron Winklevoss, co-founder of Gemini, a crypto exchange, explained in a Medium post on Monday.
“We believe adding a layer of oversight on virtual commodity cash markets, in the form of self-regulation, is important for consumer protection and to ensure the integrity of these markets.”
A self-regulatory organization is a non-governmental body that possesses a degree of regulatory authority over an industry, including the establishment of best practices and the ability to bring enforcement actions.
In additional to Gemini, other inaugural members include crypto exchanges Bitstamp, Bitflyer USA and Bittrex.
Maria Filipakis, a former executive director at the New York Department of Financial Services who was instrumental in drafting virtual currency regulations known as the BitLicense, will serve as its first executive director.
“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 in a statement.
Member exchanges reckoned that the group would better enable consumer protections and forge better relationships with governmental regulators.
“The blockchain industry must focus on protecting its customers and operating in a responsible manner to significantly increase adoption globally,” said John Roth, chief compliance and ethics officer at Bittrex, adding that the VCA will “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.”
The exchanges will convene an inaugural working group meeting in September to hash out membership details, create a board of directors, establish guidelines for best practice promotion and other administrative components.
In advance of that, the group’s website stresses that it will function as an independent non-profit group that will not operate any trading markets, that it will not serve as a trade association, that it “will not provide regulatory programs for security tokens or security token platforms” and that it will help set adopt best practice standards
Brian Quintenz, a commissioner with the Commodity Futures Trading Commission who has been vocal in his calls for an SRO for the crypto industry, also commended the VCA’s organization in a statement:
“Ultimately, an independent and empowered SRO-like entity could have a meaningful impact on the integrity and credibility of this young marketplace. Today’s announcement is a positive step towards that realization.”
Source: Just In Time? Winklevoss-Backed Crypto Self-Regulatory Effort Picks Up Steam