The Virtual Commodity Association, a non-profit, independent organization backed by Gemini founders Cameron and Tyler Winklevoss, is laying the groundwork to advocate its self-regulatory plans before Congress.
A collection of four major cryptocurrency exchanges – Gemini, bitFlyer, Bittrex, and Bitstamp – in collaboration with commercial consultants, law firms, and compliance experts are working to establish a self-regulatory organization (SRO) for the cryptocurrency industry.
The organization has launched six committees to write white papers that delineate industry best practices concerning the Bank Secrecy Act and know your customer procedures, custody and security issues, enforcement protocols, insurance standards, market integrity, and taxation, according to a statement. These measures are made in anticipation of a potential congressional hearing that would affirm the VCA as a self-regulating watchdog.
Yusuf Hussain, VCA President, said the consortium is already “in conversation with supportive regulatory bodies,” and has identified the industry challenges of most concern for the regulatory community.
Each committee will focus on areas where there is still regulatory uncertainty. That being for each branch:
- BSA/AML — how to apply Bank Secrecy Act and Know Your Customer controls, including blockchain analytics and transaction monitoring.
- Custody and Security —how to implement and maintain current best practices for cryptocurrency custodianship.
- Enforcement — how to execute the regulatory policies and procedures established by the VCA and respond to customer concerns and complaints.
- Insurance — how to establish minimum, appropriate insurances and coverages for cryptocurrency exchanges and custodians.
- Market Integrity — how to facilitate cross-market information sharing, surveillance, and auditing to detect and deter manipulative and fraudulent activity.
- Tax — how to establish a tax framework and interpretation of tax code law as it relates to cryptocurrency trading.
By pairing each committee with industry leaders steeped in regulatory knowledge, the VCA aims to develop “well-informed, sensible regulation.”
Additionally, representatives from Navigant Consulting and Perkins Coie will work as advisors alongside each committee.
“The VCA is grateful to the individuals and companies willing to commit their time towards these committees and advance the goals of the VCA in fostering consumer protection and market integrity for the virtual currency industry,” said Hailey Lennon, Secretary of the VCA, in a statement.
“These committees directly address the concerns of regulators that are trying to figure out the crypto space,” Hussain said. He added that the VCA is “not a replacement for but a supplement to traditional regulatory bodies.”
Collaboration with traditional finance
Modeled after FINRA, the VCA will collaborate with traditional financial operators to leverage their expertise when developing practices and standards to better oversee and surveil cryptocurrency markets as well as design appropriate consumer protections.
Hussain said the relationship between traditional finance and crypto does not precisely map, adding that the “Federal government sees challenges in a fast paced, innovative environment.”
“Regulation has to keep that same pace,” he said. Through its commingling of traditional and crypto firms, Hussain said the VCA in a position to “facilitate cross-market information sharing” and curb market manipulation and other fraudulent activities in real time.
By demonstrating a commitment to progress as well as consumer protections, the VCA hopes to “enable crypto becoming mainstream” and entice more, and larger institutions into the field.
In order to become a registered SRO, the VCA will require congressional approval. “Once a good set of standards is in place, we can take those to congress,” said Hussain.
The VCA was founded in 2018 and is open to all U.S. digital asset platforms and custodians.
It’s important to ensure crypto-industry is mature and battle-tested, claims Ripple’s Brad Garlinghouse
The Senate’s hearing on Facebook’s Libra with David Marcus is the talk of the town. Brad Garlinghouse, CEO of Ripple, is the latest to give his views on the hearing. Garlinghouse said that the debate was necessary for the crypto-industry to mature.
“I’m heartened by the (largely) thoughtful dialogue from this week’s congressional hearings on @Libra_ . Committee members are supportive of blockchain and “payments innovation in the U.S., but skeptical that Facebook is the right steward given the history of broken trust.”
He added that the crypto-industry needs to mature and it would only happen if tough questions are asked, ensuring that the crypto-industry is “battle-tested” with proper regulatory oversight to protect investors and customers.
The Senate is today acknowledging the existence of cryptocurrencies and blockchain technology that is taking the world by the storm. This hearing comes after President Donald Trump sent out a slew of tweets outlining his negative views on Bitcoin.
Congressman Patrick McHenry was also one to add fuel to this fire, stating,
“Whether Facebook is involved or not, change is here. Digital currencies exist. Blockchain technology is real… So the question then becomes – what are American policymakers going to do to meet the challenges and the opportunities of this new world of innovation?”
One particular word that keeps popping up in the hearing and with the SEC is ‘innovation.’ While regulators and policymakers are trying their best to make regulations happen, it has been a slow ride. SEC commissioner Hester Peirce said it best when she said that the SEC might be driving innovation to other places. However, she reiterated that the SEC wants it to be a “safe harbor” approach.
A Twitter user, @XRPCryptoWolf, commented,
“I kept telling everyone since the beginning of the year that 2019 is the year that we finally get regulatory clarity on #Crypto & #Blockchain from many countries around the world Also Brad has been tweeting a lot of threads lately so I’m guessing this is a bullish sign for 2019?”
Top gainers: Altcoins rally and record significant gains, a day after Libra-induced correction wave
The collective crypto-market suffered a major setback after yet another hearing on Facebook’s Libra pulled down the prices of most major cryptocurrencies. However, the market soon recovered, with the collective market cap rising to $268.8 billion, with Bitcoin enjoying a dominance of 65.4%.
Major altcoins posted significant gains over the past day following the pullback.
After sustaining acute losses throughout the week, falling below key support levels and touching the $84-mark, Litecoin [LTC] rose by 15.08% over the last 24 hours. At press time, the silver to Bitcoin’s gold held a market cap of $5.74 billion and was priced at $91.57, at press time. It had a 24-hour trading volume of over $4.8 billion.
Bitcoin SV [BSV]
The ninth-largest cryptocurrency in the world, BSV also rebounded by 14.21% over the past 24 hours and held a market cap of $2.33 billion, at press time. BSV was priced at $130.50 and enjoyed a 24-hour trading volume of $453.6 million, at press time.
After staying in the red territory for a long time, the eleventh largest cryptocurrency by market cap rallied by 10.01% and pushed itself to a price of $0.023. TRX held a market cap of $1.57 billion and a 24-hour trading volume of $583.3 million. The recent upsurge in TRX’s price also coincided with the introduction of new DApps in the Tron ecosystem.
The second largest cryptocurrency on CoinMarketCap, ETH retraced its steps to the bullish realm after a surge of 8.81% over the last 24 hours. This surge drove the valuation of Ethereum to $217.70, at press time. The asset’s market cap stood at $23.26 billion, and the 24-hour trading volume was recorded to be $9.43 billion.
JP Morgan’s Jamie Dimon: Facebook’s Crypto Isn’t a Short-Term Concern
Jamie Dimon, the CEO of J.P. Morgan Chase, has said he doesn’t expect Facebook’s planned Libra cryptocurrency to have a short-term impact on the bank.
In an analysts call Tuesday, first reported by CNBC, Dimon appeared to suggest that it was too early to speculate on how the effort, advertised as a global currency for the unbanked, would impact his company or its outlook. JP Morgan is the leading bank in terms of U.S. retail deposits, according to its most recent annual report.
“We’re going to be talking about Libra three years from now. I wouldn’t spend too much time on it,” Dimon said, when asked about Facebook’s entrance into the financial sector through cryptocurrency.
The chief executive added:
“To put it in perspective, we’ve been talking about blockchain for seven years and very little has happened.”
In previous interviews, Dimon has noted that cryptocurrency companies might compete with legacy banks. Still, he believes regulations will be a factor in how such technologies may be rolled out to the public, potentially delaying their timelines.
“Governments are going to insist that people who hold money or move money all live according to rules where they have the right controls in place; no-one wants to aid and abet terrorism or criminal activities,” Dimon said.
Facebook planned to debut the stable-backed cryptocurrency in 2020, but has since come out to say it will not offer the digital currency until all regulatory concerns have been addressed.
“We don’t mind competition,” Dimon said. “The request is always going to be the same: We want a level playing field.
JPMorgan proposed its own cryptocurrency, JPM Coin, in February to be used internally to speed up transactions. “The technology is very good, but it takes time in terms of licensing and approval. It must be explained,” lead developer Umar Farooq said prior to a trial period commencement.
For his part, David Marcus, lead developer of Facebook’s blockchain, has said, Libra is “not designed as a substitute for bank accounts,” in a Senate Banking Committee hearing on the cryptocurrency yesterday. A second day of testimonies is now underway.
Jamie Dimon via CNBC