Four major cryptocurrency exchanges are teaming up develop a self-regulatory organization (SRO) that would work cohesively to develop rules, regulations, and to set new regulatory standards for the cryptocurrency and blockchain industry.
News of the potential SRO comes several months after the idea was first proposed by Cameron Winklevoss, co-founder of the Gemini exchange.
The self-regulatory organization is called the Virtual Commodity Association Working Group. It will be working to draft, and lobby, sets of regulatory measures that would reduce the amount of fraud and scams within the industry.
It would also help world governments to implement common sense and “do no harm” regulation to the crypto industry. If taken seriously by regulatory authorities, the group could become a powerful SRO group that could change the cryptocurrency markets for the better.
Self-Regulatory Organization Long in the Works
The four exchanges that have signed onto the Virtual Commodity Association Working Group are Gemini, Bittrex, Bitstamp, and bitFlyer USA.
Although unconfirmed, it is likely that the Winklevoss brothers, the two men at the head of the Gemini exchange, are the ones behind the creation of this group, as this has been a long-held idea by the brothers.
The news of the group comes five months after Cameron Winklevoss explained a very similar concept in a personal Medium post, where he outlined his idea, citing the proposed group’s purpose as:
“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 concept is not unconventional, as it is modeled off of similar organizations that exist within equities and securities markets. These groups are very similar conceptually in that they develop industry standards and work closely with regulators in order to reduce fraudulent practices while still allowing for innovation.
While speaking to Business Insider, the founder of CoinRoutes, Dave Weisberger, discussed the new group, saying:
“It is a great sign that multiple competing exchanges have recognized that working together, to improve the overall industry, in their mutual self-interest…Institutions are genuinely skeptical today over the fairness and data quality in the crypto market. At CoinRoutes, even though we help our clients consolidate the data, there is a lot of concern over the quality of the exchange data we aggregate as well as underlying manipulation. An industry SRO is a great start towards ameliorating those concerns.”
Winklevoss Twins Continue Moving Forward Despite Several Setbacks
The development of a self-regulatory group is a win for the Winklevoss twins, who have been hit hard by several setbacks over the course of 2018.
Following the bull run at the end of 2017, Gemini exchange has seen declining trading volume ever since. The brothers also have seen a drop in value of their personal cryptocurrency holdings, which supposedly account for a large portion of their net worth.
The worst setback for the brothers, however, was the denial of their exchange’s proposed ETF by the U.S. Securities and Exchange (SEC). This denial not only closed the chances for Gemini becoming the first issuer of a Bitcoin ETF, but it also negatively affected market sentiment, leading to a brief market sell-off.
Featured image from Shutterstock.
