Though the crypto industry is actively developing, expanding its geography and widening its horizons, the regulatory issues are still not finalized. In March, Gemini founders Cameron and Tyler Winklevoss proposed to create a cryptocurrency self-regulatory organization (SRO) with a view to change the situation.
Cameron Winklevoss explained the idea of such an organization in his personal blog post:
“Foster financially sound, responsible, and innovative virtual commodity markets through a system of industry sponsored standards, sound practices, and oversight that promotes price discovery, efficiency, and transparency…Incentivize the detection and deterrence of manipulative and fraudulent acts and practices, including partnering with regulators and particularly the CFTC to share or refer information, as appropriate.”
The main goal of this new organization called the Virtual Commodity Association Working Group is to present rules, norms and regulations for the cryptocurrency and blockchain industry as well as to develop new regulatory standards for this sphere.
The initiative was positively welcomed by the community and now four major cryptocurrency exchanges, including Gemini, are ready to meet and start discussions of their strategy and plans for ensuring a higher level of transparency, consumer protection, and risk management in the U.S. crypto market.
Three other exchanges, besides Gemini, that have taken a decision to become a part of the newly created organization are bitFlyer USA, Bittrex and Bitstamp. As for the structure of the new association, it will have an executive director and an independent board.
As it has been announced, Maria Filipakis will take the post of the VCA interim Executive Director. Previously, Ms. Filipakis worked for the New York Department of Financial Services as its Executive Deputy Superintendent and participated in drafting the Department’s rules and regulations for digital assets.
Ms. Filipakis commented her new position and the idea of the newly-created association the following way:
“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.”
It is expected that at the first meeting, that is to be held next month, the participants of the working group will discuss guidelines for the VCA membership; principles for best practices and rules-based marketplaces which will ensure transparency, openness, sufficient risk management, and liquidity; frameworks for best practices aimed at addressing conflicts of interest arising between members, client communications issues, client disclosures, and record keeping.
Membership will be available for virtual commodity platforms as well as over-the-counter trading firms and other trading facilities acting as counterparties, which will provide collaboration between the widest range of businesses that service the space.
Foundation of the VCA is undoubtedly a real win for the Winklevoss twins, who have suffered several setbacks this year. The most serious one was the recent denial of Gemini’s proposed ETF by the U.S. Securities and Exchange.