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Four of the largest US cryptocurrency exchanges have united to launch the ‘Virtual Commodity Association,’ the first attempt at an industry-sponsored Self-Regulated Organization (SRO) to oversee virtual commodity markets. The exchanges participating in the new working group are Bitstamp, BitFlyer, Bittrex, and Gemini, which is an NYC based digital asset company led by the Hollywood recognized Winklevoss twins.
The VCA will hold its inaugural meeting in September to discuss organizational structure. They will form specific guidelines for membership, transparency, and issues concerning potential conflicts of interest. The organization will also address staffing, such as establishing a formal Board of Directors and appointing a permanent Executive Director. Maria Filipakis, Executive Deputy Superintendent at the New York Department of Financial Services (DFS), is serving as the group’s interim Executive Director.
Ms. Filipakis stated, “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.”
The VCA is a US-based organization, but the companies that make up the group have experience working with regulators around the globe. Bitflyer is headquartered in Japan, and Bitstamp was launched in Luxembourg.
“We’re proud to be a part of the Virtual Commodity Association as a way to add another element of protection for consumers,” said Nejc Kodri, Bitstamp CEO. “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 U.S.”
One of the main concerns that the SEC has had with cryptocurrency markets is its lack of oversight. They cited this issue as a top reason for their rejection of regulated financial products tied to Bitcoin. The formation of this new SRO should help ease those concerns.
“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,” said Hailey Lennon, bitFlyer USA’s Director of Compliance.
Echoing Lennon’s comments, Yusuf Hussain, Gemini Trust Company LLC’s Head of Risk, stated, “This is the first of many steps in policing the digital asset markets and answering the call of regulators.”
The ultimate goal of the VCA is to promote fairness, transparency, risk management, and liquidity in virtual commodity markets. If successful, it would be another sign that Wall Street’s arrival to this new space is around the corner.