The Association for Digital Asset Markets (ADAM) has published its Code of Conduct to promote integrity, fairness and efficiency in digital asset markets.
The association says that the Code is intended to inform market participants on best practices and to complement, not replace, existing regulation and is part of a long-term effort to define and promote ethical conduct by all digital asset market participants. All ADAM members plan to sign the Code in early 2020 and adhere to its principles.
The Code, which is principles-based, was designed with input from asset market participants, former regulators, legal counsel, and academic partners. The group has also engaged with state and federal regulators and policymakers, to keep them informed about their work.
The Code is divided into principles which guide and define appropriate, professional standards in the following areas: compliance and risk management, market ethics, conflicts of interest, transparency and fairness, market integrity, custody, information security and business continuity, and anti-money laundering and countering the finance of terrorism.
“As digital asset markets continue to develop in size and stature and become ever more enmeshed in capital markets, it is important for us and our peers to level the playing field and establish the high standards and operating protocols deserving of this promising and innovative asset class,” says Philippe Bekhazi, CEO of XBTO Group, an ADAM founding member.
“Our Code has been developed to complement existing law and regulation, and establishes standards designed to earn the long-term trust of institutions, consumers, financial regulators and policymakers,” adds Charles Cascarilla, CEO and co-founder of Paxos, another ADAM founding member. “As this dynamic and evolving industry takes shape, we are proud to implement this roadmap to better shape a sustainable future for all market participants.”
In addition to launching the Code, ADAM also announced that BitGo, CMT Digital, Tagomi, Anchorage and BlockFi have joined the association.
Of course, as market participants in the FX industry can testify, getting widespread adoption of such a code of conduct once it has been published comes with its own challenges.
Indeed, while one member of ADAM tells Profit & Loss that the publication of this Code is undoubtedly a step in the right direction for the crypto industry, they appeared to harbour few illusions about how challenging it will be to actually implement it. In particular, they note that at a time when many firms are busy keeping up with business demands that it could be hard to get them to devote time and energy to analysing and signing up to a code that doesn’t have the heft of regulation. In addition, they note that without any central authority – such as regulators or central banks – to promote and enforce the new Code, it could struggle for adoption and relevance.