Grygo is the chief content officer for FTF News.
Many people have been wondering when the controversial crypto currency phenomenon will get the regulatory oversight needed to provide safeguards for investors and other participants.
In the U.S., the SEC and CFTC are pursuing guidelines and enforcement actions as the crypto efforts move full speed ahead. I’m certain that the regulators would appreciate additional help in policing crypto-based transactions and venues.
Enter the Virtual Commodity Association (VCA), which describes itself as “an industry-sponsored, self-regulatory organization (SRO) to oversee virtual commodity marketplaces.”
The twins Cameron and Tyler Winklevoss, co-founders of Gemini Trust Company, and other digital exchanges are behind the VCA. In fact, Gemini and Bitstamp, bitFlyer USA and Bittrex are forming a working group that will hold its first meeting in September 2018.
The VCA is also naming an executive director, independent board and a framework for industry best practices, officials say. “The VCA 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,” officials add.
“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 says in a prepared statement.
While it’s still early days for the VCA, the working group has announced that it will discuss:
- Guidelines for membership in the VCA;
- Guidelines for best practices and rules-based marketplaces that will promote fairness, transparency, risk management, and liquidity;
- Guidelines for best practices that will address member conflicts of interest, client communications, client disclosures, and record keeping;
- And staffing the VCA, to include “an executive director, among others, and composition of the board of directors.”
The VCA fully intends to work with incumbent regulators. In a statement, Yusuf Hussain, Gemini Trust Co.’s head of risk, says “This is the first of many steps in policing the digital asset markets and answering the call of regulators.”
John Roth, chief compliance and ethics officer at Bittrex, says that by working with the VCA, “we can advance our shared goals of improving transparency, accountability and security across all virtual currency trading platforms,” according to a prepared statement. “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.”
The Working Group is looking to other organizations that would like to participate. The contact link is inquiries@virtualcommodities.org The initial press release about the group can be found here.
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