If there is anything that the crypto market learned in 2018 is that the industry still has a long way to go in terms of regulations. The crypto industry, for the longest time, has been considered in a grey area taken advantage by criminals and those who are running away from taxes.
In 2018, we’ve seen a bearish market primarily because regulators are already giving close attention to the industry. And so far, regulations are making progress all over the globe. The US Securities and Exchange Commission has now considered Bitcoin and Ethereum as commodities. This means both cryptocurrencies are not subject to regulations applied to stocks and other financial investments.
However, not only cryptocurrencies are subject to regulatory changes. There are also the cryptocurrency exchanges. Cryptocurrency exchanges were the ones targeted by Chinese regulators when it banned crypto activity in the country.
As for Japan, regulatory changes were applied to cryptocurrency exchanges in order to prevent future hacking incidences that could affect investors. And for this reason, even Kraken chose to halt operations in the country.
Self-Regulation Led By Gemini
In the US, Gemini is leading a working group that is scheduled to have its meeting in September. They are planning to discuss forming a self-regulatory organization that is designed to oversee the US crypto trading market. The Virtual Commodity Association (VCA) includes four crypto exchanges that cater to the US market namely: Gemini, Bitstamp, Bittrex, and bitFlyer USA.
Representatives from each company are going to be meeting this September. Part of their agenda is forming an SRO that will tackle the best practices for the digital currency industry. This will also include guidelines for future members of VCA. And also, the representatives are set to choose an executive director for the organization.
Yusuf Hussain who is the head of risk at Gemini mentioned that “This is the first of many steps in policing the digital asset markets and answering the call of regulators”. As for Bitstamp CEO Nejc Kodricc, he mentioned that “We believe in the value of self-regulation, which we pursued in Europe almost from our inception, and look forward to following a similar path in the U.S. Those that can’t or won’t comply with regulations put consumers – and their own operations – at risk”.
For now, the interim executive director for the organization is Maria Filipakis. She served as executive deputy superintendent at the New York Department of Financial Services (NYDFS). She was one of the people responsible for drafting the agency’s crypto regulatory framework called Bitlicense.
She said that “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”.
Coinbase is Not Included?
The initial list of members doesn’t have Coinbase. Coinbase currently holds half of all US crypto trading. It is also one of the very first to have received Bitlicense.
This can be considered a smart move for the crypto industry considering the need for regulatory changes. Aside from leading the VCA, Gemini is also serious about having a Bitcoin ETF. Unfortunately, their application was rejected for the second time around by the SEC.