Cameron and Tyler Winklevoss, the twins best known for operating digital-currency exchange Gemini, have called operators in the cryptocurrency space to consider establishing a self-regulatory body called the Virtual Commodity Association (VCA).
The two backers of virtual currencies are seeking to bring the digital asset class into the investing mainstream through an “SRO-like” entity — if they win the approval of the US regulators.
In a blog post, the Winklevoss twins submitted a proposal to adopt self-regulatory standards and industry-wide best practices to policing the new space amid the authorities and government mulling further possible regulatory action.
Citing the success of SROs in the United Sates, the brothers advocated for the creation of a private, independent organization according to the following rules:
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“The VCA: (i) will be a non-profit, independent regulatory organization that does not operate any markets, (ii) will not be a trade association, (iii) will not provide regulatory programs for security tokens or security token platforms, and (iv) will be in compliance with global standards and best practices for SROs.”
In remarks posted on Gemini’s website, the twins, that participated in the history of Facebook, addressed the issue of the proliferation of cryptocurrencies and ICO campaigns. They described various oversight and regulatory challenges including jurisdictional limitations that restrict CEA and CFTC authority over spot markets.
They wrote: “The purchase and sale of commodities in the spot/cash markets has been historically exempt from the CEA and CFTC jurisdiction because cash market transactions, unlike derivative contracts, are: (i) traded for immediate delivery, (ii) settle “on the spot,” and (iii) are often underpinned by a commercial purpose (i.e., a farmer selling grain). As a result, these transactions are typically found to not be speculative in nature or readily susceptible to manipulation.”
The proposed organization will require member firms to commit in writing to operating their offerings in compliance with sound practices and “provide a sanctions based accountability program to compel ongoing member compliance.”
The VCA will be open for membership to virtual commodity platforms, over-the-counter trading firms, and other trading facilities acting as counterparties.