In today’s edition of Bitcoin in Brief we cover a couple of stories that show how the cryptocurrency industry is trying to police itself. One group of companies has begun working on the formation of a self-regulatory organization and another has created a 100 BTC whistleblower reward pool.
Crypto Self-Regulatory Organization
A number of companies have jointly formed a Working Group to try and establish an industry-sponsored, self-regulatory organization (SRO) for cryptocurrency marketplaces operating in the USA. Initial participants in the Virtual Commodity Association (VCA) Working Group will include: Bitstamp, Bitflyer USA, Bittrex, and Gemini Trust. The VCA will have an executive director, independent board, and be tasked with establishing a framework for industry best practices. The VCA interim Executive Director will be Maria Filipakis, former Executive Deputy Superintendent at the New York Department of Financial Services (DFS) which created the state’s Bitlicense.
“We’re proud to be a part of the Virtual Commodity Association as a way to add another element of protection for consumers,” stated Nejc Kodrič, Bitstamp CEO. “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.”
100 BTC Whistleblower Reward
Another group of actors in the industry (including Ecoinmerce, ICO Alert, GZH, Step VC, and New Economies) has created the Crypto Community Watch, a program which provides an anonymous tip line to report wrongdoing. The group has provided a total of 100 BTC to be used as a reward pool for whistleblowers, meaning people with information on fraudulent or illegal activity from within the industry. They explain that if reported information leads directly to the arrest or legal punishment of a wrongdoer, the whistleblower responsible for it will receive a portion of the reward pool. And all submissions will be investigated by Crypto Community Watch members and sent to applicable law enforcement agencies when appropriate.
“From the recent exchange hacks to the nearly-weekly reports of fraudulent projects taking off with investors’ money, it’s clear that crypto has a problem,” said Ecoinmerce COO Rex Chen. “Enough is enough. It’s up to the industry first and the regulators second to clean up the ecosystem. If you spend your time hacking, scamming, or intentionally misleading investors, your time is up.”
SBI Helps Lastroots With FSA Order
SBI Holdings has an announced on Monday that it has made an additional investment in Lastroots, an exchange that was issued a business improvement order earlier this year by the Japanese FSA. The undisclosed infusion of capital is meant to help the company get itself into shape to become a licensed virtual currency exchange business in Japan. And in addition to the extra funds, SBI also “dispatched officers to Lastroots in order to respond to the order of business improvement received…on April 6, 2018 to strengthen the management system.”
More broadly, the investment announcement explained that “The SBI Group is expanding its contribution and partnerships with digital asset-related venture companies and will promote the creation of digital asset real demand through investment in domestic and overseas venture companies that are engaged in business utilizing digital assets and developing new products. We believe that it will contribute to the expansion and development of digital asset industry / business in the future.”
New Exchange Secures Fiat-Crypto Liquidity
Coinmetro, an Estonia-licensed crypto exchange which has been founded by the same team behind the forex broker FX Pig, has announced it secured liquidity for trading in EUR, USD, JPY, and GBP from a number of payment and e-money institutions. This means that when it launches later this year, users will be able to trade five cryptocurrencies (BTC, ETH, XRP, LTC and BCH) against all these fiat currencies. The platform will also accept Euro deposits and withdrawals via the Single Euro Payments Area (SEPA) upon launch, supported by an Estonian banking provider. The company explains that additional banking partners are being sourced in order to offer other transaction options, and these are expected to be announced later this year.
CEO Kevin Murcko said: “One of the difficulties of getting involved with crypto is “on-ramping” – finding somewhere to buy crypto in exchange for fiat money. Despite Bitcoin moving further into the mainstream and attracting established financial institutions, locating an exchange that will convert dollars, pounds, or euros to crypto is still irritatingly difficult. While some multi-coin exchanges have recently announced plans to begin accepting fiat and the creation of fiat trading pairs, their offerings are still very limited. Most exchanges permit only one or, at most, two currencies for trading with crypto, which for serious traders, is still far too restrictive.”