CFTC Commissioner Brian Quintenz has welcomed the formation of an industry trade association for cryptocurrency traders.
The Virtual Commodity Association (VCA) has formed a working group and will hold its inaugural meeting in September. It says the meeting will consider guidelines for membership as well as for best practices and rules-based marketplaces that will promote fairness, transparency, risk management, and liquidity.
It will further discuss best practice guidelines that will address member conflicts of interest, client communications, client disclosures, and record keeping; as well as the staffing needs of the association, including an executive director and compositon of the board of directors.
The interim executive director will be Maria Filipakis, who was formerly an executive deputy superintendent at the New York Department of Financial Services (DFS) and was instrumental in drafting the DFS rules and regulations for virtual currency.
The initial participants in the working group will include Bitstamp, bitFlyer USA, Bittrex, and the Winklevoss twins’ Gemini Trust Company. The VCA says the group will work towards the goal of establishing an industry-sponsored, self-regulatory organisation (SRO) to oversee virtual commodity marketplaces.
In welcoming the move, Quintenz says, “Given the absence of federal oversight jurisdiction in the crypto market, in February and again in March of this year I called on the crypto platform community to come together and develop a self-regulatory organisation-like entity that could develop and enforce rules.
“I am pleased that progress has been made on such a concept,” he continues. “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 realisation.”
For her part, Filipakis says, “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.”
Describing the VCA as a way to add another element of protection for consumers, Nejc Kodri?, Bitstamp CEO, says, “We believe in the value of self-regulation, which we pursued in Europe almost from our inception, and look forward to following a similar path in the US. Those that can’t or won’t comply with regulations put consumers – and their own operations – at risk.”
Yusuf Hussain, Gemini Trust Company head of risk, adds, “This is the first of many steps in policing the digital asset markets and answering the call of regulators.”
The VCA says it welcomes indication of interest from other organisations that would like to participate, a point made by Hailey Lennon, bitFlyer USA’s director of compliance, who says, “Regulations in the cryptocurrency space are evolving to encompass this new technology. Industry leaders with extensive knowledge and who are impacted by regulations should really be part of the conversation.”
John Roth, chief compliance and ethics officer at Bittrex, agrees, “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. 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 US leadership in the industry.”