The founders of the Gemini digital currency exchange, Cameron and Tyler Winklevoss, are proposing the creation of a self-regulatory organization (SRO) to set standards in an effort to foster confidence in the cryptocurrency market,
Gemini published a blog post Tuesday proposing the creation of the Virtual Commodity Association to introduce standards, provide oversight, and self-regulation to the fledgling industry.
The new organization, which would be open to virtual commodity platforms, over-the-counter (OTC) trading firms, and other firms, aims to “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.”
The proposed group would require firms to commit to adhere to a set of best practices for virtual currency firms, including measures to establish internal controls, marketplace rules, policies on dealing with conflicts, cybersecurity, and regulatory co-operation, among other things. It would also establish an enforcement mechanism to encourage ongoing compliance.
“The promise of virtual commodities and their impact on the future will be profound — but individuals and institutions need to feel safe and secure when transacting. We believe a thoughtful SRO framework that provides a virtual commodity regulatory program for the virtual commodity industry is the next logical step in the maturation of this market,” the blog post says.
Commenting on the proposal, Brian Quintenz, U.S. Commodity Futures Trading Commission commissioner, says: “Ultimately, a virtual commodity SRO that has the most independence from its membership, the most diversity of views, and the strongest ability to discover, reveal, and punish wrongdoing will add the most integrity to these markets. I encourage Gemini (or any other market participant, advocacy group, platform, or firm) to be aggressive in promoting these qualities within any SRO construct.”