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Several cryptocurrency exchanges have signed on to what appears to be the industry’s first self-regulatory organization, a step toward transparency in the notoriously opaque and volatile market.
The Virtual Commodity Association, a group founded by Cameron and Tyler Winklevoss of Gemini Trust Co., announced its first members Monday: Bittrex Inc.; bitFlyer USA, Inc., a unit of Japan’s bitFlyer Inc.; Bitstamp, Inc. and Gemini. Representatives from the firms will meet in September to begin setting goals for the association, including rules for the marketplaces and guidelines for members, the association said.
Bitcoin’s viral growth has fueled a $200 billion industry that now counts more than a thousand digital currencies, and a nascent infrastructure has emerged for trading those assets. While firms and traders are ostensibly subject to the laws of their home countries, regulators have yet to comprehensively regulate them. As a result, the market is subject to a steady stream of hacks, cons and market manipulations.
While regulators have been playing catch-up in a market that trades across borders, the exchanges themselves have an ability to monitor and curb fraud on their own sites. Through the Virtual Commodity Association, known as VCA, members can share practices and methods with an eye toward cleaning up the industry and protecting customers.
An expanded version of this report appears on WSJ.com.
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