New Cryptocurrency Group Eyes Self-Regulation
The Virtual Commodity Association, backed by the well-known Winklevoss twins, aims to create rules of the road for currency exchanges.
You might have heard about how Cameron and Tyler Winklevoss—the twins made infamous in the Facebook biopic The Social Network—have bounced back in a big way with cryptocurrency.
But what you might not know is that they’re at the center of a new industry group that hopes to self-regulate the virtual currency space. Earlier this year, the Winklevoss twins announced a proposal to launch a self-regulatory organization for virtual currencies, further deepening the efforts the two have undertaken on their own accord with their company, Gemini Trust. Now, those efforts are gaining in momentum, as the Virtual Commodity Association has a starting board, a new executive director, and has scheduled its first formal meeting.
Beyond Gemini, other exchanges taking part in VCA include Bittrex, Bitstamp, and bitFlyer USA.
The organization comes at a time when bitcoin and other kinds of virtual currencies have gained public notice and much momentum, but lingering questions around their safety and security have remained. Trading such assets has grown popular, but regulators are playing a game of catch-up.
VCA would step in to assist with this by coming up with industry best practices, while taking steps to push against bad actors in the space. In their blog post, the Winklevoss twins cited the success of similar organizations in helping to burnish the reputation of other types of currency exchanges, such as derivatives.
“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,” they wrote. “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.”
Analysts say an organization like VCA has the potential to be a game-changer for cryptocurrency’s reputation. Dave Weisberger, founder of the trading platform CoinRoutes, said it highlighted maturity within the space.
“It is a great sign that multiple competing exchanges have recognized that working together to improve the overall industry is in their mutual self-interest,” Weisberger told Business Insider.
Commodity Futures Trading Commissioner Brian Quintenz, who has called for the creation of a self-regulatory organization, applauded the steps taken to form such an organization.
“Ultimately, an independent and empowered SRO-like entity could have a meaningful impact on the integrity and credibility of this young marketplace,” he said in a statement. “Today’s announcement is a positive step towards that realization.”