A consortium of virtual commodity providers including Bitstamp, Inc., Bittrex, Inc., bitFlyer USA, Inc., and Gemini Trust Company, LLC, are banding together to establish a self-regulatory organization to monitor the virtual commodity marketplaces.
The group, called Virtual Commodity Association (VCA) Working Group, will meet in September to draft an industry-sponsored SRO mechanism, the group said in a statement.
“The blockchain industry must focus on protecting its customers and operating responsibly to increase adoption globally significantly," said John Roth, chief compliance and ethics officer at Bittrex. "By working with the VCA, we can advance our shared goals of improving transparency, accountability, and security across all virtual currency trading platforms.”
He added the initiative would complement the discussions the group is undertaking with legislators and regulators to develop a long-term solution that establishes a fully-compliant ecosystem for blockchain, while at the same time pushing for economic growth, innovation, with the U.S. at the helm of leadership in the nascent technology.
During their scheduled meeting next month, the group will be voting for positions in an independent board and executive director, and also establish a framework for best practices in the space. Maria Filipakis was designated as interim executive director of the group. Filipakis was a former executive deputy superintendent at the New York Department of Financial Services (DFS) who play a crucial role in drafting DFS regulations and rules for digital currencies.
“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.”
Aside from electing its officers, VCA will also discuss best practices and rules-based marketplaces to promote transparency, fairness, liquidity and risk management. They will even touch on addressing conflicts of interests among its members, client disclosure, client communications and record keeping.
“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 Kodrič, 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. Those that can't or won't comply with regulations put consumers – and their operations – at risk."
In her recent visit to the Philippines, Cecilia Mueller Chen, a director at Zug, Switzerland-based Crypto Valley Association (CVA), said that SRO is the best way to move forward for the blockchain space and to hasten the technology’s adoption while protecting the interests of all stakeholders.