Cryptocurrency millionaires the Winklevoss twins are pushing for order in the chaotic world of digital currencies.
They want to form a self-regulating Virtual Commodity Association in the United States.
Led by their Gemini cryptocurrency exchange, they want other exchanges to police the emerging industry.
Yusuf Hussain, Gemini’s head of risk, said: “This is the first of many steps in policing the digital asset markets and answering the call of regulators.
“Regulations in the cryptocurrency space are evolving to encompass this new technology. Industry leaders with extensive knowledge and who are impacted by regulations should really be part of the conversation.”
Regulatory battles
The move comes after they have lost another battle in their ongoing struggle with regulator the Securities and Exchange Commission (SEC) over launching a Bitcoin exchange traded fund (ETF).
The SEC rejected the application claiming cryptocurrencies were open to fraud and manipulation due to a lack of regulation.
So far, exchanges Bitstamp, bitFlyer USA and Bittrex have signed up to the cause.
VCA executive director Maria Filipakis said: “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.”
Cameron and Tyler Winklevoss want to promote ‘fairness, transparency, risk management, and liquidity’ in the cryptocurrency market.
Logical step
“The self-regulating approach has historically worked to protect and police various markets. For example, the National Futures Association (NFA) is a self-regulator for the US derivatives industry and is a model for how the VCA will work together with the Commodity Futures Trading Commission to provide additional oversight to virtual commodity cash markets,” said a statement from the pair.
“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 on marketplaces. A thoughtful self-regulating framework that provides a virtual commodity regulatory program for the virtual commodity industry is the next logical step in the maturation of this market.
“We believe adding a layer of oversight on virtual commodity cash markets, in the form of self-regulation, is important for consumer protection and to ensure the integrity of these markets.”