The Virtual Commodity Association (VCA) working group was created when four of the largest digital exchanges: Gemini Trust Company, Bitstamp, Inc., bitFlyer USA, Inc. and Bittrex, Inc came together to promote self-regulation in the cryptocurrency trading markets. VCA has their goals set on the establishment of an industry-sponsored, self-regulatory organization (SRO) to oversee virtual commodity marketplaces. Such a feat can be accomplished by turning their interests to the development and implementation of new industry standards, increasing the transparency, and collaborating with global and domestic regulators to prevent fraud and to work against the external manipulations of the market.
Gemini had hired Nasdaq Inc, earlier this year, to conduct surveillance of the cryptomarket so that they can step-up the enforcement. The group has already decided that Maria Filipakis, former Executive Deputy Superintendent at the New York Department of Financial Services (DFS), to be the Interim Executive Director of VCA. She stated, “I applaud the VCA and its members in their commitment to strengthening the digital asset industry’s regulatory landscape, rules for the protection of customers, and bring forth industry setting best practices and market transparency.”
The working group is looking forward to providing an update on its progress following its inaugural meeting and welcomes indications of interest from other organizations that would seek to participate. The four representatives of the VCA working group is expected to convene on September 2018, for the first time, to discuss the setup of the organization. There are some reservations in place regarding the formation of the VCA.
The agenda of the meeting is expected to include the guidelines and requirements needed for VCA membership, frameworks for addressing conflicts of interests, client communication, guiding principles for best practices and client exposure. There will be some strict requirements that VCA members will need to stick to in terms of security, information sharing, protection, and transparency. Such an effort will ensure fair play in the market.
If everything does go as planned and this group creates such an industry-sponsored, self-regulatory organization (SRO), then this could lead to an increase in opportunities throughout the cryptomarket that suffered from instability, high-risk trading on the market and the rumors of illegality and fraud.
This group can find new ways to solve the opacity of cryptomarkets, develop better practice guidelines for the industry, and find better ways to boost liquidity. The formation of such a group can aid in bringing individuals, lawmakers, and regulators on the same page and interact over how the regulations should work in such a new industry. Thus, the creation of the group could bring hope and ambition for a better growth of the cryptocurrency trading sphere.