A group of cryptocurrency exchanges has joined up with Gemini founders Cameron and Tyler Winklevoss to launch a new industry-focused self-regulatory organization (SRO).
First proposed in March, the Virtual Commodity Association aims to “foster financially sound, responsible and innovative virtual commodity markets” by developing industry standards and encouraging cryptocurrency exchanges to prevent market manipulation and other fraudulent actions.
On Monday, the proposal took its next step, with Gemini launching a working group to begin developing these standards.
As explained by an introductory post on the VCA’s website, the Commodity Futures Trading Commission (CFTC) has legal jurisdiction over commodities, such as bitcoin and ether, though it does not necessarily have jurisdiction over cash and spot markets derived from commodities.
However, under the Commodity Exchange Act (CEA), the CFTC can regulate fraud or market manipulation.
The post explained:
“The purchase and sale of commodities in the spot/cash markets has been historically exempt from the CEA and CFTC jurisdiction. Nevertheless, cash markets for virtual commodities – as it is a less well known industry – can benefit from an additional layer of oversight. We believe that adding this layer can provide even more protection for consumers and ensure the integrity of these markets and growing industry.”
To that end, the VCA will appoint a board of directors to oversee the organization, which will commit to remaining a non-profit, independent group that can “help set and adopt global standards and best practices.”